A Reinterpretation of Classical Monetary Theory

Glasner, David

doi:10.2307/1058905

Cited by 45 publications

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“…Regarding Smith, see Fetter [1965Fetter [ ] 1978Laidler 1981;Humphrey 1982;Perlman 1989;Glasner 1992;andCassidy 1994. Regarding the banking school, see Viner 1937;Rist [1938Rist [ ] 1940Laidler 1972 (concerning Tooke only) ;Glasner 1985;Glasner 1989;Arnon 1991, 135-36;Arnon 2011, 228;Skaggs 1991Skaggs , 1994Gedeon 1997;andCassidy 1998. George Selgin (1989, 490-91) recognizes that the "channels of circulation" doctrine (reflux in the form of convertibility) and the "real bills" doctrine (reflux in the form of repayment) are actually distinct in Smith's writings, but the distinction is abandoned regarding the analysis of the banking school, which is then associated with antibullionism (492-93).…”

Section: The Law Of Reflux Versus the Antibullionist Doctrinementioning

confidence: 99%

“…For this reason, Glasner (1985Glasner ( , 1989Glasner ( , 1992 and Skaggs (1991Skaggs ( , 1994Skaggs ( , 1999 distinguish (1) the reflux ultimately in the form of convertibility of demand debts into money, that is, the law of reflux, from (2) the reflux only in the form of repayment of loans previously granted by the bank, that is, the antibullionist real bills doctrine. 5 To better understand the distinction, consider the following two formulations.…”

Section: The Law Of Reflux Versus the Antibullionist Doctrinementioning

confidence: 99%

“…On the cost of production theory of money, see Niehans 1978Niehans , 1987. On the distinction between money, demand debts, and other bills, see Rist [1938] 1940and Skaggs 1995 On the law of reflux and the real bills principle, see Glasner 1985Glasner , 1992and Skaggs 1991. On the business cycle theory and the theory of speculation, see Skaggs 1994 andLe Maux 2009.…”

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The Banking School and the Law of Reflux in General

Maux¹

2012

History of Political Economy

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In his Lectures, Knut Wicksell ([1906] 1935, 172) assessed that the banking principle had been "a vague name for an essentially vague thing." This "vague" interpretation seemed to have taken a firm hold, for in the ensuing years much more attention was paid to the currency school. As a result, the literature on the mid-nineteenth-century British monetary debates has tended to undervalue the banking school's contribution to the theory of money and banking. Marion Daugherty (1943, 246) significantly claimed that "whereas it is easy to describe the Currency theory because it formed an intelligibly connected set of ideas, the banking school views were far from constituting a coherent or unified theory." Frank Fetter ([1965] 1978, 191) explained the "vagueness, if not inconsistency," by the fact that "the banking school was not trying to develop monetary theory for later generations." More recently, Denis O'Brien (1995, 66) restated that the currency school was "perfectly clear," whereas the banking school literature was deemed "a much more cloudy domain." Not surprisingly, the quantitative literature broadly reflects the "vague" or "cloudy" interpretation.By contrast, another literature mentions several banking principles and revisits most of them. In this respect, Jürg Niehans (1978, 1987) upholds a

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Section: The Law Of Reflux Versus the Antibullionist Doctrinementioning

confidence: 99%

Section: The Law Of Reflux Versus the Antibullionist Doctrinementioning

confidence: 99%

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The Banking School and the Law of Reflux in General

Maux¹

2012

History of Political Economy

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“…The distinction within the Classical Economics between the ‘classical’ monetary theory and the ‘quantity’ theory has been drawn by Niehans (, , ), Glasner (, , ) and Skaggs (, , ) – the latter reference studying Thornton's () monetary analysis. The overall feature of the classical monetary theory is that it proposes one principle of regulation for each kind of issue (specie money, bank issues and inconvertible paper money).…”

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Cantillon and Hume on Money and Banking: The Foundations of Two Theoretical Traditions

Maux

2013

Journal of Economic Surveys

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Abstract. The distinction between the 'classical' monetary theory and 'quantity' theory has been proposed in literature on money and banking. The overall feature of the classical theory of money is that it holds one principle of regulation for each kind of issue (metallic money, bank issues and paper money) whereas the quantity theory applied the causality and proportionality postulates for all kinds of monies. Without claiming to adjudicate the validity of such a distinction, the paper investigates the foundation of each tradition. In this respect, this paper, respectively, examines, and provides a survey of the secondary literature on, Cantillon's Essai and the Hume's Discourses.

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“…Among those who argue that Smith does not use the price-specie-flow mechanism, the assessment of Smith's monetary theory differs. Some assess Smith's theory as more or less equally significant as Hume's price-specie-flow mechanism (Humphrey 1981, Petrella 1968), while others argue that Smith's theory is inferior (Angell 1926, O'Brien 1975, Rothbard 1995, Stigler 1976, and still others appreciate it as superior (Girton and Roper 1978, Glasner 1985, 1989, Laughlin 1903). This assessment is in many cases based on the own monetary approach of the respective author.…”

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Adam Smith and the “rich country–poor country” debate: eighteenth-century views on economic progress and international trade

Schumacher¹

2015

The European Journal of the History of Economic Thought

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A Reinterpretation of Classical Monetary Theory

Cited by 45 publications

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The Banking School and the Law of Reflux in General

The Banking School and the Law of Reflux in General

Cantillon and Hume on Money and Banking: The Foundations of Two Theoretical Traditions

Adam Smith and the “rich country–poor country” debate: eighteenth-century views on economic progress and international trade

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