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Silvio Gesell’s Plan for Negative Nominal Interest Rates Meets the Mormons

Summary:
JP Koning tweets this interesting article about Mormon stamp scrip during the Great Depression. It wasn’t just the town of Woergl that employed Silvio Gesell’s plan for negative nominal interest rates to at least some extent! JP Koning also points to Irving Fisher’s explanation of how to manage such a scrip. Ryan Decker then tweets this Cleveland Fed blog post about stamp scrip, highlighting this paragraph:What made stamp scrip unique among scrip schemes was a series of boxes on the reverse side of the note. Stamp scrip took two basic forms—dated and undated (often called “transaction stamp scrip”). Typically, 52 boxes appeared on the back

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Silvio Gesell's Plan for Negative Nominal Interest Rates Meets the Mormons

JP Koning tweets this interesting article about Mormon stamp scrip during the Great Depression. It wasn’t just the town of Woergl that employed Silvio Gesell’s plan for negative nominal interest rates to at least some extent! JP Koning also points to Irving Fisher’s explanation of how to manage such a scrip. Ryan Decker then tweets this Cleveland Fed blog post about stamp scrip, highlighting this paragraph:

What made stamp scrip unique among scrip schemes was a series of boxes on the reverse side of the note. Stamp scrip took two basic forms—dated and undated (often called “transaction stamp scrip”). Typically, 52 boxes appeared on the back of dated stamp scrip, one for each week of the year. In order to spend the dated scrip, the stamps on the back had to be current. Each week, a two-cent stamp needed to be purchased from the issuer and affixed over the corresponding week’s box on the back of the scrip. Over the coming week, the scrip could be spent freely within the community. Whoever was caught holding the scrip at week’s end was required to attach a new stamp before spending the scrip. In this scheme, money became a hot potato, with individuals passing it quickly to avoid having to pay for the next stamp.

Miles Kimball
Miles Kimball is Professor of Economics and Survey Research at the University of Michigan. Politically, Miles is an independent who grew up in an apolitical family. He holds many strong opinions—open to revision in response to cogent arguments—that do not line up neatly with either the Republican or Democratic Party.

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