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Multi-currency regime and markets in early nineteenth-century Finland

  • Miikka Voutilainen (a1), Riina Turunen (a1) and Jari Ojala (a1)


Pre-industrial money supply typically consisted of multiple, often foreign currencies. Standard economic theory implies that this entails welfare loss due to transaction costs imposed by currency exchange. Through a study of novel data on Finnish nineteenth-century parish-level currency conditions, we show that individual currencies had principal areas of circulation, with extensive co-circulation restricted to the boundary regions in between. We show that trade networks, defined here through the regional co-movement of grain prices, proved crucial in determining the currency used. Market institutions and standard price mechanisms had an apparent role in the spread of different currencies and in determining the dominant currency in a given region. Our findings provide a caveat for the widely held assumption that associates multi-currency systems with negative trade externalities.


Corresponding author

Corresponding author: Dr M. Voutilainen, Jyvaskyla 40014, email: Other authors:,


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The authors are grateful to Jussipekka Luukkonen for his assistance in collecting the research data. Miikka Voutilainen acknowledges financial support from OP Group Research Foundation grants 20170130, 20180071 and 20190117, and he warmly thanks Professor Gregory Clark and the All-UC Group in Economic History for the research visit to UC Davis in 2018. The authors acknowledge financial support from the Academy of Finland grant 308975. We thank the editor and two referees for very helpful comments. The usual disclaimer applies.



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Multi-currency regime and markets in early nineteenth-century Finland

  • Miikka Voutilainen (a1), Riina Turunen (a1) and Jari Ojala (a1)


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