Analysis On Reasons Of The Paper Currency Credit Change In The Song Dynasty

The form of currency has been experienced from physical currency, metal currency, credit currency to electronic currency. The Chinese earliest paper currency——"jiaozi" appears in the Song Dynasty. The emergence of paper currency in the Song Dynasty is the need of the development of commodity economy. Paper currency changes from convertible and stable currency to inconvertible and instable currency during the two Song Dynasties. Paper currency in the Song Dynasty declined because of the unstable credit. Research on changes of paper currency credit has more important practical significance to maintain the stability of the contemporary currency credit.This paper uses the analytical method of institutional economics and studies the reasons of paper currency credit change in the Song Dynasty based on the matching perspective of the policy practice and management thoughts of paper currency. Meanwhile, the author studies the relationship among the changes of the monetary system, policy practices and management thoughts, then tries to draw some new conclusions.This paper has four chapters, they are:Chapter Ⅰ:Introduction. This chapter introduces the background, the purpose and significance of the topic, then summarizes and comments on the existing research about on paper currency.Chapter Ⅱ:The management thoughts of paper currency in the Song Dynasty. First of all, this chapter summarizes some developments of metal currency thoughts in the Song Dynasty and analyzes the impact of these thoughts on management thoughts of paper currency, then summarizes and compares the management thoughts of paper currency in the Song Dynasty.Chapter Ⅲ:The vicissitude of paper currency credit. This chapter analyzes the matching degree of policy practices and management thoughts in the process of vicissitude of paper currency credit. Then the chapter compares the different changes of paper currency credit during the two Song Dynasties.Chapter Ⅳ:The vicissitudes of paper currency credit based on the perspective of monetary system. Firstly, this chapter summarizes the vicissitude of paper currency credit, the matching degree of management thoughts and policy practices, the vicissitudes of monetary system. Then this chapter points out that monetary system determines the vicissitudes of paper currency credit. Finally, this chapter analyzes the relationship between monetary system and management thoughts and it also studies the relationship between monetary system and policy practices.According to the analysis, the main conclusions are as followings:(1)The matching degree of the policy practices and management thoughts determines the paper money credit. The higher matching degree the policy practice and management thoughts have, the more stable paper currency will be and vice versa.(2)The monetary system determines the matching degree of the policy practices and management thoughts. The paper monetary system of Northern Song Dynasty has experienced the following process:Folk-issued redeemable currency——Government-issued redeemable currency——Government-issued irredeemable currency. The paper monetary system of Southern Song Dynasty has only changed from Government-issued redeemable currency to Government-issued irredeemable currency. The former change is economic-oriented and the matching degree of policy practices and management thoughts is higher; the latter change is fiscal-oriented and the matching degree is lower.(3)Government-issued currency will inevitably change from redeemable currency to irredeemable currency because of the lack of incentive and constraint mechanisms. The uneven distribution of "Violence potential" between government and folk will lead the government to use paper currency as a violent tool to obtain more benefits.