The later 3rd and early 4th century CE witnessed a period of deep transformation of the Roman monetary system. Traditionally, Rome had operated a tri- or even quadri-metalllic coinage system: gold for the higher denominations, silver for smaller transactions, and finally brass, bronze and copper for base coinage. Throughout the later 2nd and early 3rd century, the denarius, which used to be a piece of almost pure silver during Republican times and the Julio-Claudians until Nero, becomes a billon object, with less than 50% of silver content by the time of Septimius Severus. By the latter third quarter of the 3rd century, there is almost no more silver in the Roman monetary system. Copper, barely hiding under a thin disguise of silver, is prevalent, while gold coins become commodity objects and the large bronze coins of the past are distant memory.
The Tetrarchic attempt at reintroducing a trimetallic system around AD 300 fails rapidly, leading to a system dominated by gold coins in its upper scale, and by an increasingly light and poorly produced coinage of copper at the other end of the spectrum. Imperial decisions and papyrological information point towards a system based on the respective commodity values of gold and copper, with no more monetary medium adapted to medium-sized transactions. Inflation appears rampant, current prices being expressed in many myriads (10,000) of denarii by the second half of the 4th century. However, this inflationary situation hides a high degree of price stability once the intrinsic purchasing power of both monetary metals is considered.
The historian may suspect that the Imperial authorities engineered the spiraling increase of prices denominated in currency units. The Empire was struggling at closing its budgetary gap in a society where the recourse to public debt was not an option. Inflating the nominal value of existing coins, in this context, was a convenient if not dangerous way to provide for public expenses.
Such a material-based coinage valuation system, coupled with a melting currency system, thus represents a major shift with the previous periods of Roman history. From the later Republic until the monetary dislocation of the 260s’, the stickiness of the price system was remarkable indeed. The legionary pay in AD 200 stood 33% above its Augustan level. This is slightly over 0.1% per annum on a compounded basis. However, during the same period, the main currency unit, the denarius, lost 50% of its metal value.
An inescapable observation is that the currency regime of the earlier Empire stood opposite to the monetary reality experienced by the later Empire: stable prices and increasingly fiduciary coinage vs. melting prices and commodity coinage.
After exposing and documenting these contrasted monetary regimes, our communication will aim at capturing the respective purchasing powers of the three main monetary metals throughout Roman history, in a dynamic and comparative perspective. The degree of monetary fiduciarity, often associated with our modern economies, will be studied in the context of the economic transition of the 3rd century, shedding new lights behind the rationale of the currency reforms, which shaped the Roman coinages from Caracalla to Valentinian.
Inflation and Commodity-Based Coinages in the Later Roman Empire