Until the fourteenth century, the Scottish currency had remained fairly stable. The fall in trade and an accumulating balance of payments crisis resulted in a 35 per cent reduction in the weight of coins by the 1360s. Further devaluation followed in the 1390s, mirroring the sharp drop in trade after 1380. By 1400 the E Scots contained only three-tenths of the silver it had had in 1296, and by 1470 less than 15 per cent. As a result, the £ Scots fell sharply against the English £ sterling, from an exchange rate of 3:4 in 1373 to 1:3 in 1451. After that, the rate stabilised, until the next exchange crisis, which began in the 1570s. The inevitable result, familiar to the twentieth century but alien to the medieval consumer, was price inflation. 'All things are dearer than in times past', complained the Abbot of Dunfermline in 1309. The late medieval Scottish economy - characterised by failing exports, a balance of payments deficit and rising prices - conforms closely to the picture of many economies of the later twentieth century.

There is a tendency amongst some modem historians to write off medieval Scotland as a poor country, with a primitive economy. A certain Whig-like economic determinism has often crept into interpretations of the 'unimproved' state of agriculture before the later seventeenth century. A basic lack of law and order, so it is sometimes argued, prevented any breakthrough into the political stability which was a necessary precondition of economic growth. Yet the discovery of farming an estate for profit was not unique to the period between 1650 and 1750. The amount of medieval pastoral farming, as recent research has indicated, has been exaggerated; there was an important arable sector in the medieval rural economy that was worked intensively in the period up to 1300.

Such views stem from a vision of a single medieval period, spanning four centuries or more. In terms of trade, population and the patterns of both urban life and the cultivation of the land, it is far more appropriate to think of an early and a later medieval Scotland, separated by the new pressures and circumstances of the fourteenth century. The real dividing line came not in 1100 or 1124 but somewhere between 1296 and 1350. Before 1300, Scotland's wool trade made it one of the leading producers in Europe after England. It is difficult to think of a country which could finance cathedrals such as St Andrews or Glasgow or abbeys such as Dunfermline or Dryburgh, lay out elaborate town plans such as those of Crail or St Andrews, and begin major royal castles at Edinburgh and Stirling as poor. The extent and continuity of arable farming, in which foundations laid in the twelfth century or earlier provided a framework still recognisable in the seventeenth or eighteenth, suggests that period as the first age of Improvement. Early medieval Scotland can claim to be a dynamic society enjoying, by contemporary standards, a modest but real prosperity. Later medieval Scotland was, by contrast, a society afflicted by a series of severe problems, both natural and man-made;.its population was smaller and its standard of living worse for most of its people.