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...

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...

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...

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...

Some economists believe that the competitive survival of noninterest-bearing currency--the absence of price competition from markets for stored-value cards, banknotes, and token coins--implies a waste of resources on nonprice competition. The authors argue to the contrary that market forces...

The legal restrictions theory of money, developed by Neil Wallace and others, implies that all noncommodity currency would be interest bear ing under laissez faire (if the interest rate on bonds is positive). This note cites historical evidence to the contrary. It then analyzes the source of the...