Changes

===Inflation in the Roman Empire===

Any lesson that could have been learned by the Ptolemies’ fiscal policies was completely ignored by the Romans during the early Empire; but in retrospect they probably thought that their strong economy would continue forever. After the smoke of the Civil Wars cleared and Octavian/Augustus was declared emperor, Rome experienced nearly 200 years of solid economic growth. The gross domestic product of the early Roman Empire was similar to that of AD 1700’s Spain <ref>Temin, p. 135</ref> and the famed Roman roads, known as <i>vias</i>, evolved from being used primarily by the military to also link together far flung markets. <ref> Matthews, John. “Roman Life and Society.” In <i>The Oxford History of the Roman World.</i> Edited by John Boardman, Jasper Griffin, and Oswyn Murray. (Oxford, Oxford University Press, 2001), p. 394</ref>

Although the Romans kept few records that were directly related to their devaluing of the denarius, the records they did keep, combined with examinations of coins from the period tell the story of a deliberate attempt to stretch the silver they had as far as they could. Similar to the situation in Ptolemaic Egypt, the Romans began adding impurities to their silver coins so that more could be added to circulation. The process had two results: there were too many coins in circulation and the new coins that were being added were comprised more of other metals than silver. It is estimated that the inflation rate reached an astronomical rate of 15,000% between AD 200 and 300! In terms of a tangible example, one Roman pound of gold was valued at 72,000 denarii in AD 301, which would be nearly impossible for any Roman to have that many coins on his or her person. <ref> Malchow and Thiel, p. 23</ref> Finally, the Emperor Diocletian (ruled AD 284-306) realized that drastic measures had to be taken if he were to save the Roman economy and quite possibly Rome itself.

By AD 250, the inflationary cycle had crippled the Roman economy and threatened to bring the entire empire down. Instead of attacking the problem at the source by addressing the currency problem, Diocletian instead decided to enact price controls in 301. The edict only made things worse as it drove consumers to the black market, but the prices continued to soar. <ref> Chadwick, Henry. “Evoi: On Taking Leave of Antiquity.” In <i>The Oxford History of the Roman World.</i> Edited by John Boardman, Jasper Griffin, and Oswyn Murray. (Oxford, Oxford University Press, 2001), p. 451</ref> Suffering from myopia and a lack of understanding of economics, Diocletian’s successors for the most part were also unable to stem the tide of inflation and in fact kept many of his polices, including price controls.