Two Views of the Lender of Last Resort: Thornton and Bagehot
AbstractHenry Thornton and Walter Bagehot were both advocates of discretionary monetary policy, especially as regards the Bank of England's role as a lender of last resort, but they differed on many details of the case. Where Bagehot thought that the Bank's central position in the financial system was purely the product of a specific monopoly privileges, Thornton also saw it as the desirable and natural outcome of the operations of banking; where Bagehot located the productivity of banking in credit markets, Thornton stressed the importance of liability side of the system's balance sheet; and where Bagehot took the desirability of gold convertibility for granted, Thornton was willing to trade off this goal against the maintenance of monetary stability.
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Bibliographic InfoPaper provided by University of Western Ontario, Department of Economics in its series UWO Department of Economics Working Papers with number 20029.
Date of creation: Sep 2002
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Postal: Department of Economics, Reference Centre, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
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Other versions of this item:
- David LAIDLER, 2003. "Two Views Of The Lender Of Last Resort: Thornton And Bagehot," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 45, pages 61-78.
- B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-12-02 (All new papers)
- NEP-HIS-2002-12-02 (Business, Economic & Financial History)
- NEP-MON-2002-12-02 (Monetary Economics)
- NEP-PKE-2002-12-02 (Post Keynesian Economics)
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- Poomjai Nacaskul & Kritchaya Janjaroen & Suparit Suwanik, 2012. "Economic Rationales for Central Banking: Historical Evolution, Policy Space, Institutional Integrity, and Paradigm Challenges," Working Papers 2012-04, Economic Research Department, Bank of Thailand.
- Antoine Martin, 2002. "Reconciling Bagehot with the Fed's response to Sept. 11," Research Working Paper RWP 02-10, Federal Reserve Bank of Kansas City.
- Antoine Martin, 2008. "Reconciling Bagehot with the Fed's response to September 11," Staff Reports 217, Federal Reserve Bank of New York.
- Arie Arnon, 2007. "The Early Round Of The Bullionist Debate 1800-1802: Boyd, Baring And Thornton’S Innovative Ideas," Working Papers 0714, Ben-Gurion University of the Negev, Department of Economics.
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