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In the Northern Song dynasty 北宋 (960-1127), iron coins in Sichuan province 四川 underwent three significant changes. First, after the annexation of Shu 蜀, the central government allowed only iron coins to be used in the Sichuan province. That caused a rapid decrease in cooper coin circulation there. Second, the government issued large coins, the coin of Jingde 景德大鐵錢 and Xianfu 祥符大鐵 錢, to solve the coin circulation crisis. However, those coins nominal values differed from their actual values. That led to insufficient quantities of coins in circulation and inflation. Third, after the appearance of the unofficial paper currency jiaozi 交子, the demand for iron coins decreased. This tendency became more pronounced when jiaozi’s amount increased. That led to prices’ stabilization for a while. However, the overissue of jiaozi caused its downward adjustment. As a result, the policy lost its effectiveness. The root cause of the coin’s downward adjustment in the area was the government's fiscal deficit.
