Inflation in economic history

There were many periods of inflation in ancient history. The first of these historically attested periods dates back to the Ancient Kingdom of Egypt and the late Sumerian period, around 2100 BC, but we ignore the trigger causes (coinciding with historical periods of anarchy, the end of the Ancient Egyptian Kingdom, and the decline of the Sumerian population centers, which will finally collapse in 2002 BC). Modern written sources indicate that shortly before the collapse after the invasion of Gutei, the people of Barbro, who inhabited the Zagros mountains in the territory of modern Iran, in 3150 BC, the Akkad Empire, was in a state of severe anarchy when prices could no longer be controlled.

Source:, Inflation

Even during the reign of the heretic Pharaoh Amenhotep IV Akhenaten and his successors, Nubian mines were exploited (Nubia, now Sudan, was so rich in gold mines that the term Nwb in ancient Egyptian meant ” gold”). The weakening of Egypt’s internal power during this period was reflected in the centrifugal flight of distant provinces such as Nubia, Syria, and Palestine.


Another historically recorded period of inflation coincided with the discovery of silver mines in Spain along the Rio Tinto and Guadalquivir Rivers by the Phoenicians, between 730 BC and 620 BC, in a geographical area coinciding with the mythical Tartessos. At that time, Phoenicia was subordinated to the Assyrians, and the massive import of large amounts of silver to the Middle East caused a vertical drop in the value of the metal, so much so that Assyria itself had to intervene to prevent further imports of Latin American silver by placing garrisons in the ports of Ugarit, Sidon, Tyre and Byblos.

Another historical episode of inflation, although more restrained, occurred in Phrygia under King Midas (who ruled between 716 BC and 690 BC), whose mythical touch, which turned everything into gold, echoes both the wealth of these people and the damage caused by excessive wealth. Similarly, a century later, in Lydia, the first state to mint coins around 670 BC, extracting gold-bearing sands from the Pattolo River, giving a precious natural alloy of gold and silver called “electro”, a similar episode occurred under King Croesus. (ruled between 565 BC and 546 BC). It should be noted that both Phrygia and Lydia are located on the territory of modern Turkey, that these two historical regions were adjacent, as well as the similarity of the Greek term “Chrysos” (“gold”) with the name of the rich Lydian ruler “Croysos” (“Croesus”).

Similarly, at the end of the Assyrian Empire (612 BC) under the weak king Sinsharishkun, the ongoing civil war caused a sharp jump in prices for necessities.

Annual inflation of 400-500% devastated the daily lives of the inhabitants of Babylon and the Second Babylonian Empire between 580 BC and 538 BC (the date of the conquest of the city by the king of Persia, Cyrus the Great). Such high inflation reduced the incomes of farmers and merchants to push the last Chaldean rulers to try to take over Arabia to “soften” the price regime at the expense of income from spices transported along the eponymous “spice route”. “in the hands of the Babylonians, in the last section between the Tabuk oasis (where Jewish settlers from conquered Judea also settled, and Jerusalem was razed to the ground in 587 BC and remained there until the Muslim conquest in 630 AD) and the city of Gegra. The inability to solve the age-old problem of inflation was one of the reasons for the insufficient participation of the population in protecting the city from the Persians, as evidenced by some modern clay tablets.

Peloponnesian War

Also during the Peloponnesian War (431 – 404 BC) between Athens and Sparta, there was a period of severe inflation associated with recession due to the persistence of the war, which deprived artisans and farmers of work and trade. With the final victory of the Spartans, at the end of the thirty-year conflict, the Laconic city was flooded with “owls” (from the coinage depicted on the Athenian silver drachma of that period), which led to the undermining of the Spartan economy, which, famously, banned the use of money and the practice of trade.

During the decline of the Persian Empire, between 450 BC and 330 BC (the date of its final fall into the hands of Macedonia), continuous internal wars continued, in which usurpers within the same ruling Achaemenid family were usurped, as well as revolts of the autonomists. government satraps in various provinces of the empire forced the issuance of significant amounts in local currency (daric aureus, which initially cost twenty times the purchasing power of the Athenian silver drachma) to pay for the labor of mercenary armies hired for this purpose.

During the period of the conquest of the Persian Empire by Alexander the Great (334 – 323 BC), huge amounts of precious metals stolen from conquered and diverted countries in Greece, Macedonia, and Epirus caused a decrease in the intrinsic value of the gold contained. The Daric is Persian and the silver drachmas are Greek.

Subsequently, during the period that went down in history under the name “Hellenism”, there was general inflation of the “free currency” of that time, the Greek tetradrachm, following the uncontrolled issuance of the same by various kingdoms in which the empire of Alexander the Great was destroyed, as well as due to the proliferation of copies issued by unauthorized mints in Nubia, southern Egypt and Sinai, Libya, India, and Arabia (these countries, although not part of the Macedonian Empire, copied the Greek currency and used it for trade and current account balance).

Very serious inflation occurred at the end of the republican period in ancient Rome, when the state, to further finance military campaigns, changed the metal alloy from coins by lowering the name (quantity) of the precious metal contained in them.

Roman Empire

An even worse situation occurred between the second century AD and the final fall of the Western Roman Empire in 476: during the existence of the lower Empire, there were such noticeable changes in precious metal securities that many merchants refused to receive money. currency for goods for sale, and many soldiers also preferred payment in kind for services rendered. For example, during the reign of Constantine I (312-337), the bronze axis was reduced to a size equal to 1/4 of the republican axis three hundred years ago. Similar changes have been made to the Silverarium and Sesterzio silver and the ” gold standard . Constantine, to pay the soldiers, was forced to mint a coin of pure gold (hence the terms in Italian “money”, “soldier”, “mercenary”, etc.):

A coin with good gold content. In this case, the monetary loop of Ancient Rome was represented by a denarius, a coin that in 218 BC contained 4.5 grams of pure silver and was exchanged for ten bronze aces. Around 120 BC, it changed from the sixteen bronze axes. The silver content in the denarius of about 210on has further decreased, amounting to only 0.5% of the weight of the coin. This was offset by a surge in inflation, which has reached 1,000% over the years. By his decree, Diocletian will calm prices by reducing inflation to 100%. At that time, 300 pounds of gold was worth 5,000 denarii. At the time of the last emperor Romulus Augustus, it was worth $ 20 million. Since Constantine, the denarius has practically lost all value. Earlier, thirty years earlier, the Dalmatian Emperor Diocletian presented a basket of goods

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