The Future of Central Banking: A Lesson from United States History
AbstractThe United States Constitution evidently calls for monetary arrangements with a strict metallic standard-gold, silver, or bimetallic. How were these provisions overturned so as to result in todayfs fiat- money arrangement with no trace of a metallic standard? A crucial step involved Supreme Court decisions after the Civil War with regard to the constitutionality of the fiat ggreenbacksh issued during the war. The reasoning expounded by the Supreme Court in these decisions relied importantly on a failure to distinguish between monetary and fiscal policy provisions. Essentially the same failure has been present in much of the recent discussion concerning the financial crisis of 2007-09.
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Bibliographic InfoArticle provided by Institute for Monetary and Economic Studies, Bank of Japan in its journal Monetary and Economic Studies.
Volume (Year): 28 (2010)
Issue (Month): (November)
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More information through EDIRC
Metallic standard; Fiat money; U.S. Constitution; Legal tender cases; Monetary versus fiscal policy;
Other versions of this item:
- Bennett T. McCallum, 2010. "The Future of Central Banking: A Lesson from United States History," IMES Discussion Paper Series 10-E-14, Institute for Monetary and Economic Studies, Bank of Japan.
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
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