The Real Bills Doctrine Vs. the Quantity Theory: A Reconsideration

Public
Creator Series Issue number
  • 064
Date Created
  • 1981-01
Abstract
  • On our interpretation, real bills advocates favor unfettered intermediation, while their critics, who we call quantity theorists, favor legal restrictions on intermediation geared to separate “money” from “credit.” We display examples of economies in which quantity-theory assertions about “money-supply” and price-level behavior under the real bills regime are valid. In particular, both the price level and an asset total that quantity theorists would identify as money fluctuate more under a real bills regime than under a regime with restrictions like those favored by quantity theorists. Despite this, the Pareto criterion does not support the quantity-theory position.

Related information
Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department
Publisher
  • Federal Reserve Bank of Minneapolis
Resource type DOI
License

Relationships

In Collection:
Last modified

Downloadable Content

Download PDF

Zipped Files

Download a zip file that contains all the files in this work.

Items