The 1628 Castilian crydown: A test of competing theories of the price level
On August 7, 1628 the Castilian government halved overnight the nominal stock of money through the 50% crydown of its copper currency. The paper argues that this helicopter lift of money is a nice historical experiment to put to the test the empirical relevance of competing theories of the price level. The experiment shows how the post-crydown behaviour of the price level predicted by the weak form fiscal theory (the so-called Sargent-Wallace theory) matches actual data better than both the strong form fiscal theory and the quantity theory (the so-called monetarist theory). Classification-JEL : E31, E42, E63, E65, N13.
Volume (Year): 163 (2002)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: Avda. Cardenal Herrera Oria, 378, 28035 Madrid|
Web page: http://www.ief.es
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Woodford, Michael, 1995.
"Price-level determinacy without control of a monetary aggregate,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 43(1), pages 1-46, December.
- Michael Woodford, 1995. "Price Level Determinacy Without Control of a Monetary Aggregate," NBER Working Papers 5204, National Bureau of Economic Research, Inc.
- Bennett T. McCallum, .
"Indeterminacy, Bubbles, and the Fiscal Theory of Price Level Determination,"
GSIA Working Papers
1998-19, Carnegie Mellon University, Tepper School of Business.
- McCallum, Bennett T., 2001. "Indeterminacy, bubbles, and the fiscal theory of price level determination," Journal of Monetary Economics, Elsevier, vol. 47(1), pages 19-30, February.
- Bennett T. McCallum, 1998. "Indeterminacy, Bubbles, and the Fiscal Theory of Price Level Determination," NBER Working Papers 6456, National Bureau of Economic Research, Inc.
- Croushore, Dean, 1993. "Money in the utility function: Functional equivalence to a shopping-time model," Journal of Macroeconomics, Elsevier, vol. 15(1), pages 175-182.
- Buiter, Willem H., 1999.
"The Fallacy of the Fiscal Theory of the Price Level,"
CEPR Discussion Papers
2205, C.E.P.R. Discussion Papers.
- W.H. Buiter, 2000. "The Fallacy of the Fiscal Theory of the Price Level," CEP Discussion Papers dp0447, Centre for Economic Performance, LSE.
- Willem H. Buiter, 1999. "The Fallacy of the Fiscal Theory of the Price Level," NBER Working Papers 7302, National Bureau of Economic Research, Inc.
- Narayana R. Kocherlakota & Christopher Phelan, 1999. "Explaining the fiscal theory of the price level," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages 14-23.
- John H. Cochrane, 1998.
"Long-term Debt and Optimal Policy in the Fiscal Theory of the Price Level,"
NBER Working Papers
6771, National Bureau of Economic Research, Inc.
- Cochrane, John H, 2001. "Long-Term Debt and Optimal Policy in the Fiscal Theory of the Price Level," Econometrica, Econometric Society, vol. 69(1), pages 69-116, January.
- John H. Cochrane, 1998. "Long-term Debt and Optimal Policy in the Fiscal Theory of the Price Level," CRSP working papers 478, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Leeper, Eric M., 1991. "Equilibria under 'active' and 'passive' monetary and fiscal policies," Journal of Monetary Economics, Elsevier, vol. 27(1), pages 129-147, February.
- Rao Aiyagari, S. & Gertler, Mark, 1985. "The backing of government bonds and monetarism," Journal of Monetary Economics, Elsevier, vol. 16(1), pages 19-44, July.
- Charles T. Carlstrom & Timothy S. Fuerst, 1999. "Money growth and inflation: does fiscal policy matter?," Economic Commentary, Federal Reserve Bank of Cleveland, issue Apr.
When requesting a correction, please mention this item's handle: RePEc:hpe:journl:y:2002:v:163:i:4:p:71-92. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Belén Miquel Burgos)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.