Mostly - fail.
For a detailed explanation, I recommend "The Big Problem of Small Change" - Thomas J. Sargent, François R. Velde published in 2002 isbn 0-691-02932-6
A common strategy was to ignore the problem and hope it goes away. It didn't - see Gresham's law
All of which leads to "economic hardships" on the poor, which sounds a lot nicer than "the poor died in droves."
It seems strange, but the idea of a representational currency, coins that you can officially exchange for a fixed amount of gold, is actually a relatively recent invention. Not to be confused with fiat money - coins that you can't officially exchange for anything.
Edit: Did you mean "how did countries set the exchange rate in the old days?" If so, then typically the government reserved the right to mint coins, and the exchange rate was set by law.
Edit: Did you mean "how did countries set the exchange rate in the old days?" If so, then typically the government reserved the right to mint coins, and the exchange rate was set by law.
No, you and Alsadius answered my question perfectly. It was more of a "oh god is this as collapse prone as it seems at first glance" question.
I guess the wizard world really is just jonesing for a total economic collapse.
This is a new thread to discuss Eliezer Yudkowsky’s Harry Potter and the Methods of Rationality and anything related to it. This thread is intended for discussing chapter 81, which should be published later today. The previous thread passed 400 comments as of the time of this writing, so it will pass 500 comments soon after the next chapter is posted, if not before. I suggest refraining from commenting here until chapter 81 is posted; comment in the 12th thread until you read chapter 81. After chapter 81 is posted, I suggest all discussion of previous guesses be kept here, with links to comments in the previous thread.
There is now a site dedicated to the story at hpmor.com, which is now the place to go to find the authors notes and all sorts of other goodies. AdeleneDawner has kept an archive of Author’s Notes. (This goes up to the notes for chapter 76, and is now not updating. The authors notes from chapter 77 onwards are on hpmor.com.) When posted, chapter 81 should appear here.
The first 5 discussion threads are on the main page under the harry_potter tag. Threads 6 and on (including this one) are in the discussion section using its separate tag system. Also: one, two, three, four, five, six, seven, eight,nine, ten, eleven, twelve.
As a reminder, it’s often useful to start your comment by indicating which chapter you are commenting on.
Spoiler Warning: this thread is full of spoilers. With few exceptions, spoilers for MOR and canon are fair game to post, without warning or rot13. More specifically: