The causes of the "great inflation" of the sixteenth century have long been the subject of controversy. Since some major work in the 1930s, historians have argued over a "monetary" and a "real" interpretation. What we show in this paper is, first, that there was a dissenting opinion even then;...

In a world of endogenous money, the central bank's role in monetary policy is reduced to the setting of a very short-term official rate of interest, which indicates the price at which it will make liquidity available to the banking system. However, it is changes in market rates that affect...