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Henry Thornton: seminal monetary theorist and father of the modern central bank

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  • Robert L. Hetzel

Abstract

Henry Thorntons Paper Credit of Great Britain (1802) established once and for all the notion that central banks have the prime responsibility for controlling the money stock and the price level. This theme and the analytical framework underlying it reappeared in the famous Bullion Report (1810). There he and his coauthors contended that the central banks responsibility should be made explicit and that the mechanics for ensuring price level stability should be a matter of rules, not discretion.

Suggested Citation

  • Robert L. Hetzel, 1987. "Henry Thornton: seminal monetary theorist and father of the modern central bank," Economic Review, Federal Reserve Bank of Richmond, vol. 73(Jul), pages 3-16.
    • Handle: RePEc:fip:fedrer:y:1987:i:jul:p:3-16:n:v.73no.4
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    References listed on IDEAS

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    1. McCallum, Bennett T., 1986. "Some issues concerning interest rate pegging, price level determinacy, and the real bills doctrine," Journal of Monetary Economics, Elsevier, vol. 17(1), pages 135-160, January.
    2. Perlman, Morris, 1986. "The Bullionist Controversy Revisited," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 745-762, August.
    3. Sargent, Thomas J & Wallace, Neil, 1982. "The Real-Bills Doctrine versus the Quantity Theory: A Reconsideration," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1212-1236, December.
    4. Thomas M. Humphrey, 1981. "Adam Smith and the monetary approach to the balance of payments," Economic Review, Federal Reserve Bank of Richmond, vol. 67(Nov), pages 3-10.
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    Cited by:

    1. Robert L. Hetzel, 2016. "The Rise and Fall of the Quantity Theory in Nineteenth Century Britain: Implications for Early Fed Thinking," Economic Quarterly, Federal Reserve Bank of Richmond, issue Q4, pages 281-320.
    2. Hume, Michael & Sentance, Andrew, 2009. "The global credit boom: Challenges for macroeconomics and policy," Journal of International Money and Finance, Elsevier, vol. 28(8), pages 1426-1461, December.
    3. Robert L. Hetzel, 2008. "What is the monetary standard, or, how did the Volcker-Greenspan FOMCs tame inflation?," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 94(Spr), pages 147-171.
    4. Brodbeck, Karl-Heinz, 2015. "Goethe und das Papiergeld," Working Paper Serie des Instituts für Ökonomie Ök-14, Hochschule für Gesellschaftsgestaltung (HfGG), Institut für Ökonomie.
    5. Richard S. Grossman & Hugh Rockoff, 2015. "Fighting the Last War: economists on the lender of last resort," Departmental Working Papers 201515, Rutgers University, Department of Economics.
    6. Christian A. Conrad, 2024. "Rules or Forward Guidance versus Discretion in Monetary Policy, Evidence from two Behavioral Experiments," Applied Economics and Finance, Redfame publishing, vol. 11(4), pages 38-49, November.
    7. 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.
    8. Maria Cristina Marcuzzo, 2024. "Ricardo’s Theory of Money Matters," Palgrave Studies in the History of Economic Thought, in: Economic Theories, Protagonists and Facts, chapter 0, pages 81-101, Palgrave Macmillan.

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