The Wild Card: Colonial Paper Money in French North America, 1685 to 1719

I have another working paper available which I intend to submit in the next few days. This time, my partner is Mathieu Bédard (with whom I wrote this forthcoming article in the Journal of Private Enterprise). In the paper, we discuss the Canadian colonial experiment with paper money (written on the back of playing cards) between 1685 and 1719 in order to derive insights regarding an important debate in monetary history. For some years now (since the early 1980s), economic historians have debated why some issues of paper money in the American colonies during the 18th century did not lead to inflation. At the time of writing, no resolution seems forthcoming. This is largely the result of the absence of reliable macroeconomic data like wages, prices and outputs. We argue that Canada can help break the deadlock since we now have the needed macroeconomic data for the colony when it was under French rule and conducted similar monetary experiments as the American colonies.  The evidence for Canada suggests that more attention should be awarded to the role of the enforcement of legal tender laws in order. The abstract is below and the paper is here on SSRN and here on

We argue that the Canadian experiment with paper money (written on the backs of playing cards) can inform the puzzle of low inflation in the American colonies that experimented with paper money. The major impediment to the debate over the American experiment has been the limited data about prices and output—an impediment that does not exist for Canada thanks to recent works on its quantitative economic history (Geloso 2016). We show that variations in the money supply (M) cannot fully explain variations on the right-hand side of the equation of exchange P * Y for Canada, which leaves an important role for changes in velocity (V). The pattern of the velocity of paper money is consistent with changes in the enforcement intensity of legal tender laws. We argue that this narrative can be imported for the American colonies.


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