ABSTRACT
This chapter analyzes the development of the monetary union as a social institution, involving both a cognitive and behavioral component, in the light of the development of long-distance trade. It provides a theoretical framework to analyze the exchange of money and commodities. The chapter considers the evolution of the Hanseatic League and the expansion of trade. It analyzes the Wendish Monetary Union and explores Hanseatic links to money and banking in Bruges. The chapter argues that monetary unions were an adaptive response to monetary fragmentation. The Hanseatic trade routes provide some patterns of price mechanism interaction, allowing us to go from relative market prices of currencies to the shared monetary understanding. Hanseatic long-distance trade required some shared measure of value and more specifically a shared meaning of currency units. The Hanseatic merchants played a crucial role in long-distance trade in the Baltic and North Seas region.
