American Colonial Monetary Regimes: The Failure of the Quantity Theory and Some Evidence in Favor of an Alternate View 公开 Deposited

Creator Series Issue number
  • 234
Date Created
  • 1984-09
  • Current approaches to monetary theory and policy owe much to the "quantity theory of money." However, recent theoretical developments suggest that the manner in which money is introduced is more important, even for price level movements, than the quantity of money. Colonial American experience provides a laboratory for discriminating between these views. It is shown here that the nature of backing, rather than the quantity of money, determined its value. Large secular inflations were ended by changing the nature of backing despite the continuance of large note issues (and despite the absence of a metallic standard). Extremely large note issues and note withdrawals are shown not to have produced inflation (currency depreciation) or deflation (currency appreciation).

Subject (JEL) 关键词 Alternative title
  • American colonial monetary regimes : the failure of the quantity theory and some evidence in favour of an alternate view
Date Modified
  • 07/11/2019
Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department
  • Federal Reserve Bank of Minneapolis
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