Money as mumeraire: doctrinal aspects and contemporary relevance

Joseph Aschheim, George S. Tavlas

Abstract


At the beginning of the twentieth century, most economists took it for granted that the primary function of money is its role as a medium of exchange and that moneyshould consist of, or be backed by, gold, or silver, or both. This paper discusses three writers--Alexander Del Mar, Georg Knapp, and John Maynard Keynes--who took a different tack. By endeavouring to explain what money is, they focused on the capacity of money to have value. In so doing, they gave primacy to the unit-of-account function of money and originated the theory of chartalism. We show that the primacy placed on the numeraire by those writers provides insights into present-day analyses of general equilibrium, neutral money, business cycles, and currency-area formation.

  

JEL Codes: E40


Keywords


Money

Full Text:

PDF

References


ASCHHEIM, J. (1973), "Neutral money reconsidered", Banca Nazionale del Lavoro Quarterly Review, vol. 26, no. 105, pp. 75-83.

ASCHHEIM, J. (1977), "From money illusion to money disillusion", Banca Nazionale del Lavoro Quarterly Review, vol. 30, no. 123, pp. 319-32.

ASCHHEIM, J. and G.S. TAVLAS (1985), "Alexander Del Mar, Irving Fisher, and the quantity theory of money", Canadian journal of Economics, vol. 18, no. 1, pp. 293-313.

ASCHHEIM, J. and G.S. TAVLAS (1996), "Monetary economics in doctrinal perspective", journal of Money, Credit and Banking, vol. 28, no. 3, pp. 406-17.

ASCHHEIM, J. and G.S. TA VLAS (2004), "Academic exclusion: the case of Del Mar", European journal of Political Economy, vol. 20, no. 1, pp. 31-60.

BRUNNER, K. and A. MELTZER (1971), "The uses of money: money in the theory of an exchange economy", American Economic Review, vol. 61, no. 5, pp. 784-805.

CHAMP, B. and S. FREEMAN (2001), Modeling Monetary Economies, Cambridge University Press, Cambridge.

COWEN, T. and R. KROSZNER (1992), "German-language precursors of the new monetary economics", journal of Institutional and Theoretical Economics, vol. 148, no. 3, pp. 382-410.

DAVIES, G. (1994), A History of Money /rom Ancient Times to the Present Day, University of Wales Press, Cardiff.

DEL MAR, A. (1895), History of Monetary Systems, Effingham Wilson, London.

DEL MAR, A. (1896), The Science of Money, second edition, George Bell, London.

DEL MAR, A. (1900), The Law of Payment, Cambridge Encyclopedia Co., New York.

DELLAS, H. and G.S. TAVLAS (2006), "Wage rigidity and monetary union", Economic journal, vol. 115, no. 506, pp. 907-27.

EAGLEY, R. (1964), "On the nature of constant value and the desirability of a constant price level", Weltwirtschaftliches Archiv, Bd 92, Nr. 2, pp. 350-65.

ELLIS, H. (1935), German Monetary Theory: 1905-1933, Harvard University Press, Cambridge, Mass.

ENGEL, C. and J. ROGERS (1996), "How wide is the border?", American Economic Review, vol. 84, no. 5, pp. 1113-25.

FRIEDMAN, M. (1968), "The role of monetary policy", American Economic Review, vol. 58, no. 1, pp. 1-17.

FRIEDMAN, M. and A.J. SCHWARTZ (1986), "Has government a role in money?", journal of Monetary Economics, vol. 17, no. 1, pp. 37-62.

GOODHART, C.A.E. (1989), Money, Information and Uncertainty, Macmillan, London.

GOODHART, C.A.E. (1998), "The two concepts of money: implications for the analysis of optimum currency areas", European journal of Political Economy, vol. 14, no. 3, pp. 407-32.

HAYEK, F .A. (1976), Denationalisation 01 Money: The Argument Refined, Institute of Economic Affairs, London.

HELLEINER, E. (2003), The Making of National Money, Cornell University Press, Ithaca.

KEYNES, J.M. (1930), A Treatise on Money, Macmillan, London.

KEYNES, J.M. (1971), A Treatise on Money, in The Collected Writings of John Maynard Keynes, vol. 5, The Royal Economic Society, London, pp. 1-131.

KEYNES, J.M. (1936), The General Theory of Employment, Interest and Money, Macmillan, London.

KEYNES, J.M. (1937), "The General Theory of Employment", Quarterly journal of Economics, vol. 52.

KEYNES, J.M. (1971), "The General Theory of Employment", in The Collected Writings of John Maynard Keynes, vol. 14, The Royal Economic Society, London, pp. 108-23.

KLEIN, L.R. (1947), The Keynesian Revolution, Macmillan, New York.

KLEIN, L.R. (2004), "Comment on: Academic exclusion: the case of Del Mar", European journal of Political Economy, vol. 20, no. 1, pp. 69-71.

KNAPP, G.F. (1905, English translation 1924), The State Theory of Money, Macmillan, London.

KRUGMAN, P. and M. OBSTFELD (2000), International Economics: Theory and Policy, fifth edition, Addison-Wesley, Reading, Mass.

LERNER, A.P. (1947), "Money as a creature of the state", American Economic Review, vol. 37, no. 2, pp. 312-17.

LUCAS, R. (1980), ~Methods and problems in business cycle theory", Journal of Money, Credit and Banking, vol. 12, no. 4, pt 2, pp. 696-715.

MANKIW, G. (2001), "The inexorable and mysterious tradeoff between inflation and unemployment", Economicjfournal, vol. 111, no. 4, pp. 45-61.

MONROE, A., ed. (1924), Early Economic Thought: Selections from Economic Literature Prior to Adam Smith, Harvard University, Cambridge, Mass.

MUNDELL, R. (2004), "Comment on: Academic exclusion: the case of Del Mar", European journal of Political Economy, vol. 20, no. 1, pp. 61-68.

PATINKIN, D: (1987), "Keynes, John Maynard", in J. Eatwell, M. Milgate and P. Newman eds, The New Palgrave Dictionary of Economics, Macmillan, London, pp. 19-41.

POMFRET, R. (2005), "Currency areas in theory and practice", Economic Record, vol. 81, no. 253, pp. 166-76.

RIST, C. (1940), A History 01 Monetary and Credit Theories, Macmillan, New York.

SANDELIN, B. ed. (1999), Knut Wicksell: Selected Essays in Economics, Routledge, London.

SCHEFOLD, B. (1987), "Knapp, Georg Friedrich", in J. Eatwell, M. Milgate and P. Newman eds, The New Palgrave Dictionary of Economies, Macmillan, London, pp. 54-55.

SCHUMPETER, J. (1954), A History of Economic Analysis, Oxford University Press, New York.

SHUBIK, M. (1987), "Fiat money", in J. Eatwell, M. Milgate and P. Newman eds, The New Palgrave Dictionary of Economics, Macmillan, London, pp. 316-17.

SMITH, A. (1937), An Inquiry into the Nature and Causes of the Wealth of Nations, The Cannan Edition, The Modern Library, New York.

SWAMY, P.A.V.B. and G.S. TAVLAS (2007), "The New Keynesian Phillips curve and inflation expectations: re-specification and interpretation", Economic Theory, vol. 30, forthcoming.

TAVLAS, G.S. (1993), "The 'new' theory of optimum currency areas", The World Economy, vol. 16, no. 6, pp. 663-85.

TIMASCHEFF, N.S. (1939), An Introduction to the Sociology of Law, Harvard University, Cambridge, Mass.

TOBIN, J. (1985), "Neoclassical theory in America: J. B. Clark and Fisher", American Economic Review, vol. 75, no. 6, pp. 28-58.

VON MISES, L. (1912), The Theory of Money and Credit, Jonathan Cape, London.

VON MISES, L. (1953), The Theory of Money and Credit, Jonathan Cape, London.

WALRAS, L. (1989), Eléments d'Economie Politique Pure, second edition as translated from the 1926 definitive edition by W. Jaffe (1954), R. Irwin, Homewood.

WALSH, C.E. (2003), Monetary Theory and Policy, second edition, MIT Press, Cambridge, Mass.

WICKSELL, K. (1907), "Georg Friedrich Knapp, Die Staatliche Theorie des Geldes", Economisk Tidskrift

WICKSELL, K. (1999), "Georg Friedrich Knapp, Die Staatliche Theorie des Geldes", in Sandelin, pp. 210-19.

WICKSELL, K. (1911), Lectures on Political Economy, George Routledge and Sons, Landon.

WICKSELL, K. (1935), Lectures on Political Economy, George Routledge and Sons, Landon.

WICKSELL, K. (1936), Interest on Prices, Macmillan, London.

WILLIAMSON, J. (2005), Macroeconomics, second edition, Pearson, Boston.

WOODFORD, M. (2003), Interest and Prices, Princeton University Press, Princeton




DOI: https://doi.org/10.13133/2037-3643/9873

Refbacks

  • There are currently no refbacks.


Copyright (c) 2016 Joseph Aschheim, George S. Tavlas

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

 

 

Sponsored by   


ISSN 2037-3643


Reg. Tribunale di Roma n.377/2009 del 19/11/2009