Currency reforms of the type now being contemplated by some former Soviet republics, aimed at establishing new fiat monies linked to established currencies through fixed exchange rates, carry an inherent danger. Such reforms may, by neglecting certain requirements crucial for ensuring the...

Time-series techniques are used to assess the quantitative importance of buffer-stock money--the short-run response of real money holdings to nominal money supply shocks. The empirical model, a vector autoregression of real and nominal money balances, captures general dynamic properties of the...

Friedrich A. Hayek's critique of price level stabilization was based on the theoretical claim that only a constant money stock (M), or constant volume of nominal spending (MV), allows intertemporal price equilibrium. The claim is not generally correct. Hayek's case (in principle) for constant...

As an alternative to market failure explanations, the authors draw on theory and historical evidence to argue that fiscal considerations explain the roles governments typically play in producing and regulating money. Public monopoly production of coins and banknotes, substitution of fiat for...

Brian L. Goff, William F. Shughart, and Robert D. Tollison (1997) attribute the American League's higher hit-batsman rate since 1973 to moral hazard: pitchers who no longer bat no longer face retaliation. The authors argue that retaliation is more efficiently directed at sluggers than at...

Scott Sumner (and similarly Kevin Dowd) proposes to have the central bank write futures contracts on the Consumer Price Index, and automatically adjust the money stock in response to the public's net position in such contracts, as a way of improving the precision and credibility of monetary...