A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either indirectly through capital markets. Due to their importance in the financial stability of a country, banks are regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords. Banking in its modern sense evolved in the 14th century in the prosperous cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had their roots in the ancient world. In the history of banking, a number of banking dynasties – notably, the Medicis, the Fuggers, the Welsers, the Berenbergs, the Rothschilds – have played a central role over many centuries.
The oldest existing retail bank is Banca Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank. The concept of banking may have begun in ancient Assyria and Babylonia, with merchants offering loans of grain as collateral within a barter system. Lenders in ancient Greece and during the Roman Empire added two important innovations: they accepted deposits and changed money. Archaeology from this period in ancient China and India shows evidence of money lending. More modern banking can be traced to medieval and early Renaissance Italy, to the rich cities in the centre and north like Florence, Siena and Genoa; the Bardi and Peruzzi families dominated banking in 14th-century Florence, establishing branches in many other parts of Europe. One of the most famous Italian banks was the Medici Bank, set up by Giovanni di Bicci de' Medici in 1397; the earliest known state deposit bank, Banco di San Giorgio, was founded in 1407 at Italy. Modern banking practices, including fractional reserve banking and the issue of banknotes, emerged in the 17th and 18th centuries.
Merchants started to store their gold with the goldsmiths of London, who possessed private vaults, charged a fee for that service. In exchange for each deposit of precious metal, the goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee; the goldsmiths began to lend the money out on behalf of the depositor, which led to the development of modern banking practices. The goldsmith paid interest on these deposits. Since the promissory notes were payable on demand, the advances to the goldsmith's customers were repayable over a longer time period, this was an early form of fractional reserve banking; the promissory notes developed into an assignable instrument which could circulate as a safe and convenient form of money backed by the goldsmith's promise to pay, allowing goldsmiths to advance loans with little risk of default. Thus, the goldsmiths of London became the forerunners of banking by creating new money based on credit; the Bank of England was the first to begin the permanent issue of banknotes, in 1695.
The Royal Bank of Scotland established the first overdraft facility in 1728. By the beginning of the 19th century a bankers' clearing house was established in London to allow multiple banks to clear transactions; the Rothschilds pioneered international finance on a large scale, financing the purchase of the Suez canal for the British government. The word bank was taken Middle English from Middle French banque, from Old Italian banco, meaning "table", from Old High German banc, bank "bench, counter". Benches were used as makeshift desks or exchange counters during the Renaissance by Jewish Florentine bankers, who used to make their transactions atop desks covered by green tablecloths; the definition of a bank varies from country to country. See the relevant country pages under for more information. Under English common law, a banker is defined as a person who carries on the business of banking by conducting current accounts for his customers, paying cheques drawn on him/her and collecting cheques for his/her customers.
In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheques, this Act contains a statutory definition of the term banker: banker includes a body of persons, whether incorporated or not, who carry on the business of banking'. Although this definition seems circular, it is functional, because it ensures that the legal basis for bank transactions such as cheques does not depend on how the bank is structured or regulated; the business of banking is in many English common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business; when looking at these definitions it is important to keep in mind that they are defining the business of banking for the purposes of the legislation, not in general. In particular, most of the definitions are from legislation that has the purpose of regulating and supervising banks rather than regulating the actual business of banking.
However, in many cases the statutory definition mirrors the common law one. Examples of statutory definitions: "banking business" means the business of receiving money on current or deposit account and collecting cheques drawn by or paid in by customers, the making
A student is a person enrolled in a school or other educational institution who attends classes in a course to attain the appropriate level of mastery of a subject under the guidance of an instructor and who devotes time outside class to do whatever activities the instructor assigns that are necessary either for class preparation or to submit evidence of progress towards that mastery. In the broader sense, a student is anyone who applies themselves to the intensive intellectual engagement with some matter necessary to master it as part of some practical affair in which such mastery is basic or decisive. In the United Kingdom and India, the term "student" denotes those enrolled in secondary schools and higher. In Nigeria, education is classified into four system known as a 6-3-3-4 system of education, it implies six years in primary school, three years in junior secondary, three years in senior secondary and four years in the university. However, the number of years to be spent in university is determined by the course of study.
Some courses have longer study length than others. Those in primary school are referred to as pupils; those in university, as well as those in secondary school, are being referred to as students. The Nigerian system of education has other recognized categories like the polytechnics and colleges of education; the Polytechnic gives out National Diploma and Higher National Diploma certifications after a period of two years and/or four years of study respectively. Higher National Diploma can be obtained in a different institution from where the National Diploma was obtained. However, the HND cannot be obtained without the OND certificate. On the other hand, colleges of education give out NCE after a two year period of study. In South Africa, education is divided into four bands: Foundation Phase, Intermediate Phase, Senior Phase, the Further Education and Training or FET Phase. However, because this division is newer than most schools in the country, in practice, learners progress through three different types of school: primary school, junior school, high school.
After the FET phase, learners who pursue further studies take three or four years to obtain an undergraduate degree or one or two years to achieve a vocational diploma or certificate. The number of years spent in university varies as different courses of study take different numbers of years; those in the last year of high school are referred to as'Matrics' or are in'Matric' and take the Grade 12 examinations accredited by the Umalusi Council in October and November of their Matric year. Exam papers are set and administered nationally through the National Department of Basic Education for government schools, while many private school Matrics sit for exams set by the Independent Education Board, which operates with semi-autonomy under the requirements of Umalusi.. A school year for the majority of schools in South Africa runs from January to December, with holidays dividing the year into terms. Most public or government schools are 4-term schools and most private schools are 3-term school, but the 3-term government or public schools and 4-term private schools are not rare.
Six years of primary school education in Singapore is compulsory. Primary School Secondary School Junior College There are schools which have the integrated program, such as River Valley High School, which means they stay in the same school from Secondary 1 to Junior College 2, without having to take the "O" level examinations which most students take at the end of Secondary school. International Schools are subject to overseas curriculums, such as the British, Canadian or Australian Boards. Primary education is compulsory in Bangladesh, it is a near crime to not to send children to primary school. But it is not a punishable crime; because of the socio-economic state of Bangladesh, child labour is sometimes legal. But the guardian must ensure the primary education. Everyone, learning in any institute or online may be called a student in Bangladesh. Sometimes students taking undergraduate education are called undergraduates and students taking post-graduate education may be called post-graduates.
Education System Of Bangladesh: Education is free in Brunei. Darussalam not limited to government educational institutions but private educational institutions. There are two types of educational institutions: government or public, private institutions. Several stages have to be undergone by the prospective students leading to higher qualifications, such as Bachelor's Degree. Primary School Secondary School High School Colleges University Level It takes six and five years to complete the primary and secondary levels respectively. Upon completing these two crucial stages, students/pupils have freedom to progress to sixth-form
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, still one of the bankers for the Government of the United Kingdom, it is the world's eighth-oldest bank, it was owned by stockholders from its foundation in 1694 until it was nationalised in 1946. The Bank became an independent public organisation in 1998, wholly owned by the Treasury Solicitor on behalf of the government, but with independence in setting monetary policy; the Bank is one of eight banks authorised to issue banknotes in the United Kingdom, has a monopoly on the issue of banknotes in England and Wales and regulates the issue of banknotes by commercial banks in Scotland and Northern Ireland. The Bank's Monetary Policy Committee has a devolved responsibility for managing monetary policy; the Treasury has reserve powers to give orders to the committee "if they are required in the public interest and by extreme economic circumstances", but such orders must be endorsed by Parliament within 28 days.
The Bank's Financial Policy Committee held its first meeting in June 2011 as a macroprudential regulator to oversee regulation of the UK's financial sector. The Bank's headquarters have been in London's main financial district, the City of London, on Threadneedle Street, since 1734, it is sometimes known as The Old Lady of Threadneedle Street, a name taken from a satirical cartoon by James Gillray in 1797. The road junction outside is known as Bank junction; as a regulator and central bank, the Bank of England has not offered consumer banking services for many years, but it still does manage some public-facing services such as exchanging superseded bank notes. Until 2016, the bank provided personal banking services as a privilege for employees. England's crushing defeat by France, the dominant naval power, in naval engagements culminating in the 1690 Battle of Beachy Head, became the catalyst for England rebuilding itself as a global power. England had no choice. No public funds were available, the credit of William III's government was so low in London that it was impossible for it to borrow the £1,200,000 that the government wanted.
To induce subscription to the loan, the subscribers were to be incorporated by the name of the Governor and Company of the Bank of England. The Bank was given exclusive possession of the government's balances, was the only limited-liability corporation allowed to issue bank notes; the lenders would give the government cash and issue notes against the government bonds, which can be lent again. The £1.2m was raised in 12 days. As a side effect, the huge industrial effort needed, including establishing ironworks to make more nails and advances in agriculture feeding the quadrupled strength of the navy, started to transform the economy; this helped the new Kingdom of Great Britain – England and Scotland were formally united in 1707 – to become powerful. The power of the navy made Britain the dominant world power in the late 18th and early 19th centuries; the establishment of the bank was devised by Charles Montagu, 1st Earl of Halifax, in 1694. The plan of 1691, proposed by William Paterson three years before, had not been acted upon.
58 years earlier, in 1636, Financier to the king, Philip Burlamachi, had proposed the same idea in a letter addressed to Sir Francis Windebank. He proposed a loan of £1.2m to the government. The royal charter was granted on 27 July through the passage of the Tonnage Act 1694. Public finances were in such dire condition at the time that the terms of the loan were that it was to be serviced at a rate of 8% per annum, there was a service charge of £4,000 per annum for the management of the loan; the first governor was Sir John Houblon, depicted in the £50 note issued in 1994. The charter was renewed in 1742, 1764, 1781; the Bank's original home was in Walbrook, a street in the City of London, where during reconstruction in 1954 archaeologists found the remains of a Roman temple of Mithras. The Bank moved to its current location in Threadneedle Street in 1734, thereafter acquired neighbouring land to create the site necessary for erecting the Bank's original home at this location, under the direction of its chief architect Sir John Soane, between 1790 and 1827.
When the idea and reality of the national debt came about during the 18th century, this was managed by the Bank. During the American war of independence, business for the Bank was so good that George Washington remained a shareholder throughout the period. By the charter renewal in 1781 it was the bankers' bank – keeping enough gold to pay its notes on demand until 26 February 1797 when war had so diminished gold reserves that – following an invasion scare caused by the Battle of Fishguard days earlier – the government prohibited the Bank from paying out in gold by the passing of the Bank Restriction Act 1797; this prohibition lasted until 1821. The 1844 Bank Charter Act tied the issue of notes to the gold reserves and gave the Bank sol
The Times is a British daily national newspaper based in London. It began in 1785 under the title The Daily Universal Register, adopting its current name on 1 January 1788; the Times and its sister paper The Sunday Times are published by Times Newspapers, since 1981 a subsidiary of News UK, itself wholly owned by News Corp. The Times and The Sunday Times do not share editorial staff, were founded independently, have only had common ownership since 1967. In 1959, the historian of journalism Allan Nevins analysed the importance of The Times in shaping the views of events of London's elite: For much more than a century The Times has been an integral and important part of the political structure of Great Britain, its news and its editorial comment have in general been coordinated, have at most times been handled with an earnest sense of responsibility. While the paper has admitted some trivia to its columns, its whole emphasis has been on important public affairs treated with an eye to the best interests of Britain.
To guide this treatment, the editors have for long periods been in close touch with 10 Downing Street. The Times is the first newspaper to have borne that name, lending it to numerous other papers around the world, such as The Times of India and The New York Times. In countries where these other titles are popular, the newspaper is referred to as The London Times or The Times of London, although the newspaper is of national scope and distribution; the Times is the originator of the used Times Roman typeface developed by Stanley Morison of The Times in collaboration with the Monotype Corporation for its legibility in low-tech printing. In November 2006 The Times began printing headlines in Times Modern; the Times was printed in broadsheet format for 219 years, but switched to compact size in 2004 in an attempt to appeal more to younger readers and commuters using public transport. The Sunday Times remains a broadsheet; the Times had an average daily circulation of 417,298 in January 2019. An American edition of The Times has been published since 6 June 2006.
It has been used by scholars and researchers because of its widespread availability in libraries and its detailed index. A complete historical file of the digitised paper, up to 2010, is online from Gale Cengage Learning; the Times was founded by publisher John Walter on 1 January 1785 as The Daily Universal Register, with Walter in the role of editor. Walter had lost his job by the end of 1784 after the insurance company where he worked went bankrupt due to losses from a Jamaican hurricane. Unemployed, Walter began a new business venture. Henry Johnson had invented the logography, a new typography, reputedly faster and more precise. Walter bought the logography's patent and with it opened a printing house to produce a daily advertising sheet; the first publication of the newspaper The Daily Universal Register in Great Britain was 1 January 1785. Unhappy because the word Universal was omitted from the name, Walter changed the title after 940 editions on 1 January 1788 to The Times. In 1803, Walter handed editorship to his son of the same name.
In spite of Walter Sr's sixteen-month stay in Newgate Prison for libel printed in The Times, his pioneering efforts to obtain Continental news from France, helped build the paper's reputation among policy makers and financiers. The Times used contributions from significant figures in the fields of politics, science and the arts to build its reputation. For much of its early life, the profits of The Times were large and the competition minimal, so it could pay far better than its rivals for information or writers. Beginning in 1814, the paper was printed on the new steam-driven cylinder press developed by Friedrich Koenig. In 1815, The Times had a circulation of 5,000. Thomas Barnes was appointed general editor in 1817. In the same year, the paper's printer James Lawson and passed the business onto his son John Joseph Lawson. Under the editorship of Barnes and his successor in 1841, John Thadeus Delane, the influence of The Times rose to great heights in politics and amongst the City of London.
Peter Fraser and Edward Sterling were two noted journalists, gained for The Times the pompous/satirical nickname'The Thunderer'. The increased circulation and influence of the paper was based in part to its early adoption of the steam-driven rotary printing press. Distribution via steam trains to growing concentrations of urban populations helped ensure the profitability of the paper and its growing influence; the Times was the first newspaper to send war correspondents to cover particular conflicts. W. H. Russell, the paper's correspondent with the army in the Crimean War, was immensely influential with his dispatches back to England. In other events of the nineteenth century, The Times opposed the repeal of the Corn Laws until the number of demonstrations convinced the editorial board otherwise, only reluctantly supported aid to victims of the Irish Potato Famine, it enthusiastically supported the Great Reform Bill of 1832, which reduced corruption and increased the electorate from 400,000 people to 800,000 people.
During the American Civil War, The Times represented the view of the wealthy classes, favouring the secessionists, but it was not a supporter of slavery. The third John Walter, the founder's grandson, succeeded his father in 1847; the paper continued as more or less independent, but from t
Consumer price index
A Consumer Price Index measures changes in the price level of market basket of consumer goods and services purchased by households. The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. Sub-indices and sub-sub-indices are computed for different categories and sub-categories of goods and services, being combined to produce the overall index with weights reflecting their shares in the total of the consumer expenditures covered by the index, it is one of several price indices calculated by most national statistical agencies. The annual percentage change in a CPI is used as a measure of inflation. A CPI can be used to index the real value of wages, pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values. In most countries, the CPI, along with the population census, is one of the most watched national economic statistics; the index is computed monthly, or quarterly in some countries, as a weighted average of sub-indices for different components of consumer expenditure, such as food, shoes, each of, in turn a weighted average of sub-sub-indices.
At the most detailed level, the elementary aggregate level, detailed weighting information is unavailable, so indices are computed using an unweighted arithmetic or geometric mean of the prices of the sampled product offers. These indices compare prices each month with prices in the price-reference month; the weights used to combine them into the higher-level aggregates, into the overall index, relate to the estimated expenditures during a preceding whole year of the consumers covered by the index on the products within its scope in the area covered. Thus the index is a fixed-weight index, but a true Laspeyres index, since the weight-reference period of a year and the price-reference period a more recent single month, do not coincide. Ideally, the weights would relate to the composition of expenditure during the time between the price-reference month and the current month. There is a large technical economics literature on index formulas which would approximate this and which can be shown to approximate what economic theorists call a true cost-of-living index.
Such an index would show how consumer expenditure would have to move to compensate for price changes so as to allow consumers to maintain a constant standard of living. Approximations can only be computed retrospectively, whereas the index has to appear monthly and, quite soon. In some countries, notably in the United States and Sweden, the philosophy of the index is that it is inspired by and approximates the notion of a true cost of living index, whereas in most of Europe it is regarded more pragmatically; the coverage of the index may be limited. Consumers' expenditure abroad is excluded. Saving and investment are always excluded, though the prices paid for financial services provided by financial intermediaries may be included along with insurance; the index reference period called the base year differs both from the weight-reference period and the price-reference period. This is just a matter of rescaling the whole time-series to make the value for the index reference-period equal to 100.
Annually revised weights are a desirable but expensive feature of an index, for the older the weights the greater is the divergence between the current expenditure pattern and that of the weight reference-period. Consumer Price Index = Market Basket of Desired Year Market Basket of Base Year × 100 or CPI 2 CPI 1 = Price 2 Price 1 Where 1 is the comparison year and CPI1 is an index of 100. Alternatively, the CPI can be performed as CPI = updated cost base period cost × 100; the "updated cost" is divided by that of the initial year multiplied by one hundred. Many but not all price indices are weighted averages using weights that sum to 1 or 100. Example: The prices of 85,000 items from 22,000 stores, 35,000 rental units are added together and averaged, they are weighted this way: Housing: 41.4%, Food and Beverage: 17.4%, Transport: 17.0%, Medical Care: 6.9%, Other: 6.9%, Apparel: 6.0%, Entertainment: 4.4%. Taxes are not included in CPI computation. C P I = ∑ i = 1 n C P I i × w e i g h t i ∑
The United Kingdom the United Kingdom of Great Britain and Northern Ireland, sometimes referred to as Britain, is a sovereign country located off the north-western coast of the European mainland. The United Kingdom includes the island of Great Britain, the north-eastern part of the island of Ireland, many smaller islands. Northern Ireland is the only part of the United Kingdom that shares a land border with another sovereign state, the Republic of Ireland. Apart from this land border, the United Kingdom is surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the south and the Celtic Sea to the south-west, giving it the 12th-longest coastline in the world; the Irish Sea lies between Great Ireland. With an area of 242,500 square kilometres, the United Kingdom is the 78th-largest sovereign state in the world, it is the 22nd-most populous country, with an estimated 66.0 million inhabitants in 2017. The UK is constitutional monarchy; the current monarch is Queen Elizabeth II, who has reigned since 1952, making her the longest-serving current head of state.
The United Kingdom's capital and largest city is London, a global city and financial centre with an urban area population of 10.3 million. Other major urban areas in the UK include Greater Manchester, the West Midlands and West Yorkshire conurbations, Greater Glasgow and the Liverpool Built-up Area; the United Kingdom consists of four constituent countries: England, Scotland and Northern Ireland. Their capitals are London, Edinburgh and Belfast, respectively. Apart from England, the countries have their own devolved governments, each with varying powers, but such power is delegated by the Parliament of the United Kingdom, which may enact laws unilaterally altering or abolishing devolution; the nearby Isle of Man, Bailiwick of Guernsey and Bailiwick of Jersey are not part of the UK, being Crown dependencies with the British Government responsible for defence and international representation. The medieval conquest and subsequent annexation of Wales by the Kingdom of England, followed by the union between England and Scotland in 1707 to form the Kingdom of Great Britain, the union in 1801 of Great Britain with the Kingdom of Ireland created the United Kingdom of Great Britain and Ireland.
Five-sixths of Ireland seceded from the UK in 1922, leaving the present formulation of the United Kingdom of Great Britain and Northern Ireland. There are fourteen British Overseas Territories, the remnants of the British Empire which, at its height in the 1920s, encompassed a quarter of the world's land mass and was the largest empire in history. British influence can be observed in the language and political systems of many of its former colonies; the United Kingdom is a developed country and has the world's fifth-largest economy by nominal GDP and ninth-largest economy by purchasing power parity. It has a high-income economy and has a high Human Development Index rating, ranking 14th in the world, it was the world's first industrialised country and the world's foremost power during the 19th and early 20th centuries. The UK remains a great power, with considerable economic, military and political influence internationally, it is sixth in military expenditure in the world. It has been a permanent member of the United Nations Security Council since its first session in 1946.
It has been a leading member state of the European Union and its predecessor, the European Economic Community, since 1973. The United Kingdom is a member of the Commonwealth of Nations, the Council of Europe, the G7, the G20, NATO, the Organisation for Economic Co-operation and Development and the World Trade Organization; the 1707 Acts of Union declared that the kingdoms of England and Scotland were "United into One Kingdom by the Name of Great Britain". The term "United Kingdom" has been used as a description for the former kingdom of Great Britain, although its official name from 1707 to 1800 was "Great Britain"; the Acts of Union 1800 united the kingdom of Great Britain and the kingdom of Ireland in 1801, forming the United Kingdom of Great Britain and Ireland. Following the partition of Ireland and the independence of the Irish Free State in 1922, which left Northern Ireland as the only part of the island of Ireland within the United Kingdom, the name was changed to the "United Kingdom of Great Britain and Northern Ireland".
Although the United Kingdom is a sovereign country, Scotland and Northern Ireland are widely referred to as countries. The UK Prime Minister's website has used the phrase "countries within a country" to describe the United Kingdom; some statistical summaries, such as those for the twelve NUTS 1 regions of the United Kingdom refer to Scotland and Northern Ireland as "regions". Northern Ireland is referred to as a "province". With regard to Northern Ireland, the descriptive name used "can be controversial, with the choice revealing one's political preferences"; the term "Great Britain" conventionally refers to the island of Great Britain, or politically to England and Wales in combination. However, it is sometimes used as a loose synonym for the United Kingdom as a whole; the term "Britain" is used both as a synonym for Great Britain, as a synonym for the United Kingdom. Usage is mixed, with the BBC preferring to use Britain as shorthand only for Great Britain and the UK Government, while accepting that both terms refer to the United K
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys services; the measure of inflation is the inflation rate, the annualized percentage change in a general price index the consumer price index, over time. The opposite of inflation is deflation. Inflation affects economies in various negative ways; the negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future. Positive effects include reducing unemployment due to nominal wage rigidity, allowing the central bank more leeway in carrying out monetary policy, encouraging loans and investment instead of money hoarding, avoiding the inefficiencies associated with deflation.
Economists believe that the high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth. Today, most economists favor a steady rate of inflation. Low inflation reduces the severity of economic recessions by enabling the labor market to adjust more in a downturn, reduces the risk that a liquidity trap prevents monetary policy from stabilizing the economy; the task of keeping the rate of inflation low and stable is given to monetary authorities. These monetary authorities are the central banks that control monetary policy through the setting of interest rates, through open market operations, through the setting of banking reserve requirements.
Rapid increases in the quantity of money or in the overall money supply have occurred in many different societies throughout history, changing with different forms of money used. For instance, when gold was used as currency, the government could collect gold coins, melt them down, mix them with other metals such as silver, copper, or lead, reissue them at the same nominal value. By diluting the gold with other metals, the government could issue more coins without increasing the amount of gold used to make them; when the cost of each coin is lowered in this way, the government profits from an increase in seigniorage. This practice would increase the money supply but at the same time the relative value of each coin would be lowered; as the relative value of the coins becomes lower, consumers would need to give more coins in exchange for the same goods and services as before. These goods and services would experience a price increase. Song Dynasty China introduced the practice of printing paper money to create fiat currency.
During the Mongol Yuan Dynasty, the government spent a great deal of money fighting costly wars, reacted by printing more money, leading to inflation. Fearing the inflation that plagued the Yuan dynasty, the Ming Dynasty rejected the use of paper money, reverted to using copper coins. Large infusions of gold or silver into an economy led to inflation. From the second half of the 15th century to the first half of the 17th, Western Europe experienced a major inflationary cycle referred to as the "price revolution", with prices on average rising sixfold over 150 years; this was caused by the sudden influx of gold and silver from the New World into Habsburg Spain. The silver spread throughout a cash-starved Europe and caused widespread inflation. Demographic factors contributed to upward pressure on prices, with European population growth after depopulation caused by the Black Death pandemic. By the nineteenth century, economists categorized three separate factors that cause a rise or fall in the price of goods: a change in the value or production costs of the good, a change in the price of money, a fluctuation in the commodity price of the metallic content in the currency, currency depreciation resulting from an increased supply of currency relative to the quantity of redeemable metal backing the currency.
Following the proliferation of private banknote currency printed during the American Civil War, the term "inflation" started to appear as a direct reference to the currency depreciation that occurred as the quantity of redeemable banknotes outstripped the quantity of metal available for their redemption. At that time, the term inflation referred to the devaluation of the currency, not to a rise in the price of goods; this relationship between the over-supply of banknotes and a resulting depreciation in their value was noted by earlier classical economists such as David Hume and David Ricardo, who would go on to examine and debate what effect a currency devaluation has on the price of goods. The adoption of fiat currency by many countries, from the 18th century onwards, made much larger variations in the supply of money possible. Rapid increases in the money supply have taken place a number of times in countries experiencing political crises, produ