By A.L.M. Abdul Gafoor
Abstract
The article traces the evolution of paper currency from the outset to the present level of its development. Gold was initially used as money. For facility gold coin was minted. First the goldsmith’s receipt of depositors’ coin was used as currency and was the precursor of paper money. This was followed by the banks issuing bank notes and lastly Govts issued Notes and declared them legal tender. The paper money was gradually delinked from gold by all Govt to adopt deficit financing. This triggered inflation putting common mans’ welfare in jeopardy. However in the view of the author, it is the depreciation in the value of currency and not inflation which causes surge in prices.
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