Answer to Question #189480 in Economics for NICHOLE

Question

Using your understanding of exchange rates and international currency, explain why the Austrian government would decide to ban the stamp script currency. [A] (200 Words)

Answer 1

Silvio Gesell proposed a system of stamped money in order to accelerate monetary circulation and to free money from interest. This was part of a global

socialist system intended to free economy from rent and interest. Among the experiments that took place, several were based on his ideas, notably in the Austrian town of Wörgl and in the United States. These experiments were always local and never lasted more than a few months. Trust is the main issue of this kind of

monetary organization; and such experiments can only take place successfully on a small scale.