This chapter uses the classical money model introduced in Chapter 2 to explain the different views of Adam Smith and David Hume on banking and the price-specie-flow mechanism (PSFM). These differences reappeared in the debates between the Banking School and the Currency School over Peel's Bank...

This chapter considers the law of reflux and its alternative interpretations: (1) as a monetary policy rule for stabilizing the price level and (2) as rule for individual banks to follow to remain liquid. The chapter argues that Adam Smith endorsed only the second interpretation, and that the...

Cet article étudie la crise qui, en 1825, affecta l'économie anglaise et les travaux que John Stuart Mill, Thomas Tooke et John Ramsay McCulloch consacrèrent à son analyse. Alors que McCulloch s'appuyait, pour l'expliquer, sur la tradition ricardienne, Mill et Tooke s'en écartent et sans...

Three centuries of events, episodes, and policy controversies reveal that certain classical theories of monetary policy have outperformed other theories whose superficial, albeit fallacious, logic makes them perennially popular with the general public, politicians, and even some policymakers....

A long-standing but unsettled controversy concerning monetary experiences in colonial America has recently been reopened with considerable vigor. Ignoring doctrinal aspects, the main substantive issue concerns the relationship between money holdings and price levels during episodes in which...