Summary:
In the year 1023 AD, the Song government established the Jiaozi authority which is responsible for Jiaozi issuance and exchange in Chengdu, Sichuan, marking a full millennium this year. Jiaozi represents a significant financial innovation in China's history, initiating a grand experiment in the history of currency with banknote serving as a credit medium. The successes and failures of Jiaozi are highly instructive for modern monetary policy and currency stability. Unconstrained issuance of paper money inevitably leads to inflation and devaluation. A sound, sustainable monetary system conducive to economic stability and growth emerges from competition. Today, most countries adopt a system where paper money serves as a national credit currency (fiat money), necessitating a clear monetary policy aims to maintain currency value stability, thus highlighting the importance of establishing and refining a modern central banking system. In studying the historical contributions of Jiaozi, it is crucial to pay attention to details, particularly the commercial credit behind private-issued Jiaozi, reflect on the reasons for the ultimate failure of government-issued Jiaozi due to fiscal over-issuance, and focus on researching the series of credit support system arrangements behind Jiaozi, such as reserve requirements, issuance quote limits, segmented issuance systems, circulation payment systems, and other details like redemption discount rates and the scope of circulation.
易纲. 纪念北宋交子诞生1000周年兼论纸币发行约束问题[J]. 金融研究, 2023, 521(10): 1-7.
YI Gang. Commemorating the 1000th Anniversary of the Birth of Jiaozi in the Northern Song Dynasty and Discussing the Constraints on Currency Issuance. Journal of Financial Research, 2023, 521(10): 1-7.
