Economists have long debated the relationship of bank credit to the business cycle. The attribution of economic cycles to the "inherent instability" of fractional-reserve banking has been advanced not only by Austrian scholars in the tradition of Murray Rothbard, but also by a number of...

President Jackson vetoed the bill to re-charter the Second Bank of the United States on 10 July 1832. I describe events leading to the veto and through the Bank’s dissolution in 1836 using private correspondence and official government documents. These sources reveal a political process...

Is political unity a necessary condition for a successful monetary union? The early United States seems a leading example of this principle. But the view is misleadingly simple. I review the historical record and uncover signs that the United States did not achieve a stable monetary union, at...

As a result of legal restrictions on branch banking, an extensive interbank system developed in the United States during the 19th century to facilitate interregional payments and flows of liquidity and credit. Vast sums moved through the interbank system to meet seasonal and other demands, but...

During the colonial era, the French colonial government in Canada experimented with paper money printed on the back of playing cards. The first experiment lasted from 1685 to 1719. In the first years, there was little inflation in spite of a rapidly expanding stock of playing card money. It is...

Over the past fourteen years, the U.S. Federal Reserve has rescued overleveraged financial companies, purchased trillions of dollars of mortgage-backed securities, and created novel facilities to support ordinary businesses, nonprofits, and local governments. While some argue that the Fed has...

We show that decentralized privately created money with unstable values can hinder the traded, more transaction-friction sensitive, sector of the economy. We do so in the context of the NationalBanking Act of 1864 in the United States that created a new federally-regulated, fully-backed currency...

As a result of legal restrictions on branch banking, an extensive interbank system developed in the United States during the 19th century to facilitate interregional payments and flows of liquidity and credit. Vast sums moved through the interbank system to meet seasonal and other demands, but...

This paper analyses the issue of the dynamics of the TARGET2 system balances during the sovereign debt crisis, when some countries registered a decisive inflow of the central bank liquidity and others showed an outflow. The dynamics in the TARGET2 are here explained as being due to a fall in the...