The Suspension of Cash Payments as a Monetary Regime
By setting bounds on money growth, the commodity standard is a solution to the monetary authorityâ€™s time inconsistency problem, which arises from the fixed wage structure of the economy. If there is a supply shock to the backing commodity, the suspension of the commodity standard may be desirable in terms of stabilisation of production and consumption. By representing a credible commitment to return to the commodity standard, the suspension of cash payments maintains the value and circulation of money. Lessons and evidence are taken from Englandâ€™s experience of the suspension of cash payments between 1797 and 1821.
|Date of creation:||15 Feb 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 01334 462420
Fax: 01334 462444
Web page: http://www.st-andrews.ac.uk/cdma
More information through EDIRC
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.:
- V. V. Chari & Patrick J. Kehoe, 1989.
122, Federal Reserve Bank of Minneapolis.
- Flandreau, Marc, 2007. "Pillars of Globalization: A history of monetary policy targets, 1797-1997," CEPR Discussion Papers 6252, C.E.P.R. Discussion Papers.
- Michael D. Bordo & Robert Dittmar & William T. Gavin, 2006.
"Gold, fiat money and price stability,"
2003-014, Federal Reserve Bank of St. Louis.
- Goodfriend, Marvin, 1988.
"Central banking under the gold standard,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 29(1), pages 85-124, January.
- Blackburn, Keith & Christensen, Michael, 1989. "Monetary Policy and Policy Credibility: Theories and Evidence," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 1-45, March.
- Arthur J. Rolnick & Warren E. Weber, 1998.
"Money, inflation, and output under fiat and commodity standards,"
Federal Reserve Bank of Minneapolis, issue Spr, pages 11-17.
- Rolnick, Arthur J & Weber, Warren E, 1997. "Money, Inflation, and Output under Fiat and Commodity Standards," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1308-21, December.
- 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 1212-36, December.
- Canzoneri, Matthew B & Dellas, Harris, 1995.
"Real Interest Rates and Central Bank Operating Procedures,"
CEPR Discussion Papers
1099, C.E.P.R. Discussion Papers.
- Canzoneri, Matthew B. & Dellas, Harris, 1998. "Real interest rates and central bank operating procedures," Journal of Monetary Economics, Elsevier, vol. 42(3), pages 471-494, October.
- Michael Bordo & Angela Redish, 1992.
"Maximizing Seignorage Revenue During Temporary Suspensions of Convertibility: A Note,"
NBER Working Papers
4024, National Bureau of Economic Research, Inc.
- Bordo, Michael D & Redish, Angela, 1993. "Maximizing Seignorage Revenue during Temporary Suspensions of Convertibility: A Note," Oxford Economic Papers, Oxford University Press, vol. 45(1), pages 157-68, January.
- Bordo Michael D. & Kydland Finn E., 1995. "The Gold Standard As a Rule: An Essay in Exploration," Explorations in Economic History, Elsevier, vol. 32(4), pages 423-464, October.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
- Ireland, Peter N., 1997. "Sustainable monetary policies," Journal of Economic Dynamics and Control, Elsevier, vol. 22(1), pages 87-108, November.
- Barro, Robert J, 1979. "Money and the Price Level under the Gold Standard," Economic Journal, Royal Economic Society, vol. 89(353), pages 13-33, March.
When requesting a correction, please mention this item's handle: RePEc:san:cdmawp:0707. 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: (the School of Economics)
If references are entirely missing, you can add them using this form.