This paper looks into the history of economic thought to examine the forerunners of the "new monetary economics." This approach emphasizes the role of regulations on private financial intermediation in determining the particular institutional arrangements that contemporary monetary theory treats...

During the "free banking" era in eighteenth- and early nineteenth-century Scotland, there were a number of legal restrictions affecting the evolution of the system. Scottish banking was characterized by restrictions on small-denomination and interest-bearing notes. There were also restrictions...