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[[File: Charlemagne.jpg|300px|thumbnail|left|Silver Coin of Charlemagne]]

Although the Carolingian Empire was a source of stability in the early Middle Ages and its economy was a big part of that, it was still an underdeveloped economy. Generally speaking, underdeveloped economies are comprised of four sectors – industry, commerce, monetary, and agriculture – which often overlap, at least they did in terms of the Carolingian economy. <ref> Misbach, Henry L. “The Balanced Economic Growth of Carolingian Europe: Suggestions for a New Interpretation.” <i>Journal of Interdisciplinary History</i> 3 (1972) p. 264</ref> As will be outlined below, Charlemagne focused his resources on creating this balanced economy, which eventually allowed the wool industry to dominate northern Europe’s economy in the High Middle Ages. <ref> Misbach, p. 266</ref>

In terms of monetary policies, since the Carolingian economy was still underdeveloped, Charlemagne pursued a policy that was simple by modern standards. Charlemagne benefited from circumstances outside of his control, though, as a large amount of silver was introduced to the Carolingian economy through trade with the Norse/Vikings from Russia, who had “liberated” large amounts from the Abbasid Empire in the Middle East. The emperor used the injection of silver into the economy, which was the equivalent of a modern “stimulus,” to fund ambitious building projects such as the numerous cathedrals that are still standing across western Europe. <ref> James, p. 99</ref>