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Do we need a distinct monetary constitution?

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  • Horwitz, Steven

Abstract

Elements of the Chicago and Virginia traditions of political economy have rejected both competitive money production and money's politicization via post-constitutional bargaining, opting instead for constitutionalization. This paper argues that competitive money production is not subject to the pro-cyclicality that concerns constitutional political economy. It also meets the standard of predictability that motivates constitutional perspectives, although at the level of individual prices rather than the price level. An effective monetary constitution is implicit in any constitution that protects rights to property, contract, and exchange and sets limits on the democratic process.

Suggested Citation

  • Horwitz, Steven, 2011. "Do we need a distinct monetary constitution?," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 331-338.
  • Handle: RePEc:eee:jeborg:v:80:y:2011:i:2:p:331-338
    DOI: 10.1016/j.jebo.2011.07.010
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    References listed on IDEAS

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    1. White Lawrence H., 2002. "Does a Superior Monetary Standard Spontaneously Emerge?," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(2), pages 1-15, June.
    2. Arthur J. Rolnick & Warren E. Weber, 1998. "Money, inflation, and output under fiat and commodity standards," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 11-17.
    3. Selgin, George A, 1994. "On Ensuring the Acceptability of a New Fiat Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 808-826, November.
    4. George A. Selgin & Lawrence H. White, 1994. "How Would the Invisible Hand Handle Money?," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1718-1749, December.
    5. Richard H. Timberlake, 2005. "Gold Standards and the Real Bills Doctrine in U.S. Monetary Policy," Econ Journal Watch, Econ Journal Watch, vol. 2(2), pages 196-233, August.
    6. Menger, Carl, 1892. "On the Origins of Money," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 2, pages 239-255.
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    Citations

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    Cited by:

    1. Van Den Hauwe, Ludwig, 2017. "Monetary Constitutionalism: Some Recent Developments," MPRA Paper 83052, University Library of Munich, Germany.
    2. Scott Burns, 2016. "Old (Chicago) school, new century: the link between Knight and Simons’ Chicago plan to Buchanan’s constitutional money," Constitutional Political Economy, Springer, vol. 27(3), pages 299-318, September.
    3. Alexander Salter, 2014. "Is there a self-enforcing monetary constitution?," Constitutional Political Economy, Springer, vol. 25(3), pages 280-300, September.
    4. repec:bpj:jeehcn:v:22:y:2016:i:2:p:113-138:n:2 is not listed on IDEAS
    5. Mihaela IAVORSCHI & Andreea GRADINARU, 2014. "The Healthy Currency – An Alternative To Stable Currency," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6(3), pages 43-52, September.
    6. Paul Lewis & Richard E. Wagner, 2017. "New Austrian macro theory: A call for inquiry," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(1), pages 1-18, March.
    7. Alexander William Salter, 2014. "Debt Erosion and the Market Process," Economic Affairs, Wiley Blackwell, vol. 34(3), pages 370-378, October.
    8. Degens, Philipp, 2013. "Alternative Geldkonzepte - ein Literaturbericht," MPIfG Discussion Paper 13/1, Max Planck Institute for the Study of Societies.

    More about this item

    Keywords

    Constitutional political economy; Monetary regimes; Free banking; inflation;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • N2 - Economic History - - Financial Markets and Institutions

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