As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation's experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of recent empirical research, we find the following: (1) The Fed's full history (1914 to...

By contrast to private banks, public monetary authorities – central banks and currency boards – have limited credibility in making redemption or fixed-exchange-rate commitments. Their sovereign immunity obviates legal penalties for devaluing, and their monopoly status weakens reputational...

Contrary to the claims of Arthur Rolnick and Warren Weber, Gresham's Law is not a 'fallacy.' Nor does it rest on the unrealistic assumption of an operational fixed (disequilibrium) exchange rate between two economically distinct monies. Here I interpret Gresham's Law as a result of coercive...

Economists have long believed that, absent any public withdrawals of high-powered money, an unregulated, closed banking system can expand its assets and liabilities without encountering any shortage of reserves so long as its members act in concert. Notwithstanding its popularity, this...

This article explores some implications of adaptive learning for monetary evolution using a search--theoretic framework that allows for media--of--exchange network effects. Adaptive learning precludes any voluntary transition to a fiat standard from a non--monetary state of nature and can...

It is generally believed that Congress, in imposing a prohibitive 10% tax on state banknotes in 1865, made the public better off by doing away with inferior brands of currency while simultaneously helping finance the Civil War by stimulating bond sales to national banks. In truth, the tax served...