The Big Problem of Small Change

From Charlemagne's introduction of the silver penny in 800 AD to about the middle of the 19th century, small denomination coins were a headache for governments (due to production costs and constant shortages and depreciations); it was often more profitable for owners to melt down the small coins to make larger denominations. In The Big Problem of Small Change, Stanford University economics professor Thomas J. Sargent and Federal Reserve Bank economist Franeois R. Velde describe how economists finally solved this problem by introducing fiat money (coins whose value was symbolic), paving the way for modern forms of currency and credit. This elegantly written, scholarly work will appeal to those interested in financial history or monetary theory. ( Feb.)