Written by Jacques Rueff
- The Quarterly Journal of Economics
Thursday, May 01, 1947
"[I]f the spectre of "under-employment" appears again in the world tomorrow, as is probable, (the Keynesian philosophy) will be the universal recourse of peoples and governments. If it is true, it will be the salvation of the world; if it is false, it may lead to catastrophe by turning the world to ineffective remedies which may make the evil much worse. ... Whom Jupiter wishes to destroy, he first makes mad."
When hearing or reading excited discussions of ``the new payment technologies'' and ``digital money'' it is well to maintain some historical perspective. What exactly is new, and what difference will it make? Is the coming change in the payments system revolutionary, or better understood as evolutionary? Will changes in the way money is paid from one party to another bring about changes in the character of money itself?
Written by Lawrence H. White and George Selgin
- Library of Economics and Liberty
Sunday, April 09, 2000
In all but a few areas of the world today (Northern Ireland, Scotland, and for the time being Hong Kong), currency is a nationalized industry. Treasury departments issue coins; the state-owned enterprises known as central banks issue paper notes. It was not always so. Private banks were the main issuers of paper currency in the United States and Canada a century ago, and were the sole issuers in virtually every country two centuries ago.
Nationalization of currency is largely taken for granted today, but it Read more
Written by Lawrence H. White
- The Independent Institute
Monday, January 01, 1996
The rational choice would seem to lie between either a system of “free banking,” which not only gives all banks the right of note issue and at the same time makes it necessary for them to rely on their own reserves, but also leaves them free to choose their field of operation and their correspondents without regard to national boundaries, and on the other hand, an international central bank. —F. A. Hayek (1937, 77)
Two basic types of international monetary regimes are possible: those based on various independent Read more
The year 2012 has come and gone, and so have many things that were once accepted as conventional wisdom. Let’s take a tour d’horizon and examine three ideas that bear rethinking in 2013.
Rethinking the Money Supply
I begin with the nonsensical way that most central banks, including the U.S. Federal Reserve, measure the money supply. Conventional wisdom holds that the best way to measure the money supply is to define the components that make up a particular measure of money (from M0 to broad M4) and then simply add up Read more
Critics have raised a number of theoretical and historical objections to the gold standard. Some have called the gold standard a "crazy" idea.
The gold standard is not a flawless monetary system. Neither is the fiat money alternative. In light of historical evidence about the comparative magnitude of these flaws, however, the gold standard is a policy option that deserves serious consideration.
In a study covering many decades in a large sample of countries, Federal Reserve Bank economists found that "money growth and Read more
The Federal Reserve System is a major sponsor of monetary economics research by American economists. I provide some measures of the size of the Fed’s research program (both inputs and published outputs) and consider how the Fed’s sponsorship may directly and indirectly influence the character of academic research in monetary economics. In particular, I raise the issue of status quo bias in the Fed-sponsored research.
Written by Lawrence H. White
- Hillsdale College Free Market Forum
Friday, October 05, 2012
Selgin (2012) makes an important point when he notes that:
the historical gold standard that … performed so well was an international gold standard, and [its] advantages .. were to a large extent advantages due to belonging to a very large monetary network. Consequently, a gold standard that is limited to a single country, and even to a very large country, cannot be expected to offer the same advantages as a multi-country gold standard or set of gold standards.
I have already argued above that the strongest case for Read more