The literature of monetary economics has been characterised by controversy and changes in the received wisdom throughout its history. The controversies have related not merely to the effects on incomes and prices of changes in the money supply, but even to the question of whether causality runs from money to incomes and prices or vice versa. This book begins with the pioneering work of the sixteenth century French writer Jean Bodin, followed by the celebrated John Law, and John Locke (and his eighteenth century critics). It considers both the theory and the evidence involved in the controversy between the Currency and Banking schools. Closely related to this was the work of two writers, Thomas Joplin and Walter Bagehot, both of whom provided perspectives strikingly different from those of the main controversialists and, in so doing, advanced the subject of monetary economics.
The book seeks, through the examination of monetary controversies, to provide an historical perspective on modern understanding of monetary policy. It will be essential reading for economists with an interest in monetary economics and the history of economic thought.
D.P. O'Brien, Emeritus Professor of Economics, University of Durham, UK
Contents: Preface Part I: Introduction 1. Introduction Part II: Early Monetary Debates 2. Bodin's Analysis of Inflation 3. John Law: Money and Trade Considered 4. The Rate of Interest: Locke and His Critics Part III: 19th Century British Controversies 5. The Currency and Banking Controversy 6. Monetary Base Control 7. The Lender of Last Resort Concept Part IV: Macroeconomic Models 8. Bagehot and Stabilisation 9. Joplin's Model: A Formal Statement 10. Stability With an Inbuilt Cycle Bibliography Index