The analyses of fiscal and monetary policies that the Congressional Budget Office (CBO) provides Congress tend to be biased, encouraging the use of activist stabilization policies. The CBO’s virtual neglect of economic uncertainties and its emphasis on very short time horizons make active...

The claim that bad money drives out good is one of the oldest and most cited in economics. Economists refer to this claim as Gresham’s law. Yet despite its seemingly universal acceptance, this claim does not warrant its status as a law. We find it has no convincing explanations and many...

This paper explains why the risky notes of banks established during the Free Banking Era (1837–63) were demanded even when relatively safe specie (gold and silver coin) was an alternative. Free bank notes were demanded because they were priced to reflect the expected value of their backing....

Our study examines whether there is a systematic relationship between the monetary standard under which a country operates and the rate of inflation it experiences. It also explores whether there are other properties of inflation, money, and output that differ between economies operating under a...

As the CD market has become an important source of bank funds, it has also become an important market for policymakers to understand. But so far model builders have not recognized the significance of assuming that new and old CDs are perfect substitutes. Therefore, they have misused the...

The purpose of this paper is to begin a reevaluation of the Free Banking Era by developing and examining individual bank information on the population of banks which existed under the free banking laws in four states. This information allows us to determine the number of free banks which failed...

This paper surveys recent issues in macroeconomics from the viewpoint of dynamic economic theory. The need to look beyond demand and supply curves and the insights that come from doing so are emphasized. Examples of issues in debt management and fiscal policy are analyzed.