Related Research Articles
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base. Many central banks also have supervisory or regulatory powers to ensure the stability of commercial banks in their jurisdiction, to prevent bank runs, and in some cases also to enforce policies on financial consumer protection and against bank fraud, money laundering, or terrorism financing.
A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the late 1920s to 1932 as well as from 1944 until 1971 when the United States unilaterally terminated convertibility of the US dollar to gold, effectively ending the Bretton Woods system. Many states nonetheless hold substantial gold reserves.
In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0%. Inflation reduces the value of currency over time, but deflation increases it. This allows more goods and services to be bought than before with the same amount of currency. Deflation is distinct from disinflation, a slowdown in the inflation rate; i.e., when inflation declines to a lower rate but is still positive.
The Specie Payment Resumption Act of January 14, 1875 was a law in the United States that restored the nation to the gold standard through the redemption of previously unbacked United States Notes and reversed inflationary government policies promoted directly after the American Civil War. The decision further contracted the nation's money supply and was seen by critics as an exacerbating factor of the so-called Long Depression, which struck in 1873.
In macroeconomics, the money supply refers to the total volume of money held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circulation and demand deposits. Money supply data is recorded and published, usually by the national statistical agency or the central bank of the country. Empirical money supply measures are usually named M1, M2, M3, etc., according to how wide a definition of money they embrace. The precise definitions vary from country to country, in part depending on national financial institutional traditions.
His Majesty's Treasury, occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and economic policy. The Treasury maintains the Online System for Central Accounting and Reporting (OSCAR), the replacement for the Combined Online Information System (COINS), which itemises departmental spending under thousands of category headings, and from which the Whole of Government Accounts (WGA) annual financial statements are produced.
Monetary reform is any movement or theory that proposes a system of supplying money and financing the economy that is different from the current system.
Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability. Further purposes of a monetary policy may be to contribute to economic stability or to maintain predictable exchange rates with other currencies. Today most central banks in developed countries conduct their monetary policy within an inflation targeting framework, whereas the monetary policies of most developing countries' central banks target some kind of a fixed exchange rate system. A third monetary policy strategy, targeting the money supply, was widely followed during the 1980s, but has diminished in popularity since that, though it is still the official strategy in a number of emerging economies.
Fractional-reserve banking is the system of banking in all countries worldwide, under which banks that take deposits from the public keep only part of their deposit liabilities in liquid assets as a reserve, typically lending the remainder to borrowers. Bank reserves are held as cash in the bank or as balances in the bank's account at the central bank. Fractional-reserve banking differs from the hypothetical alternative model, full-reserve banking, in which banks would keep all depositor funds on hand as reserves.
The Independent Treasury was the system for managing the money supply of the United States federal government through the U.S. Treasury and its sub-treasuries, independently of the national banking and financial systems. It was created on August 6, 1846 by the 29th Congress, with the enactment of the Independent Treasury Act of 1846. It was expanded with the creation of the national banking system in 1863. It functioned until the early 20th century, when the Federal Reserve System replaced it. During this time, the Treasury took over an ever-larger number of functions of a central bank and the U.S. Treasury Department came to be the major force in the U.S. money market.
The Bank Charter Act 1844, sometimes referred to as the Peel Banking Act of 1844, was an Act of the Parliament of the United Kingdom, passed under the government of Robert Peel, which restricted the powers of British banks and gave exclusive note-issuing powers to the central Bank of England. It is one of the Bank of England Acts 1694 to 1892.
George Selgin is an American economist. He is Senior Fellow and Director Emeritus of the Cato Institute's Center for Monetary and Financial Alternatives, where he is editor-in-chief of the center's blog, Alt-M, Professor Emeritus of economics at the Terry College of Business at the University of Georgia, and an associate editor of Econ Journal Watch. Selgin formerly taught at George Mason University, the University of Hong Kong, and West Virginia University.
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment.
The Panic of 1825 was a stock market crash that started in the Bank of England, arising in part out of speculative investments in Latin America, including the imaginary country of Poyais. The crisis was felt most acutely in Britain, where it led to the closure of twelve banks. It was also manifest in the markets of Europe, Latin America and the United States. Nationwide gold and silver confiscation ensued and an infusion of gold reserves from the Banque de France saved the Bank of England from collapse. The panic has been called the first modern economic crisis not attributable to an external event, such as a war, and so the start of modern economic cycles. The Napoleonic Wars had been highly profitable for all sectors of the British financial system, and the expansionist monetary actions taken during transition from war to peace brought a surge of prosperity and speculative ventures. The stock market boom became a bubble and banks caught in the euphoria made risky loans.
The Panic of 1866 was an international financial downturn that accompanied the failure of Overend, Gurney and Company in London, and the corso forzoso abandonment of the silver standard in Italy.
Charles Bosanquet was an English colonial official and writer.
Fiat money is a type of currency that is not backed by a commodity, such as gold or silver. It is typically designated by the issuing government to be legal tender, and is authorized by government regulation. Since the end of the Bretton Woods system in 1971, the major currencies in the world are fiat money.
The British Banking School was a group of 19th century economists from the United Kingdom who wrote on monetary and banking issues. The school arose in opposition to the British Currency School; they argued that currency issue could be naturally restricted by the desire of bank depositors to redeem their notes for gold. According to Jacob Viner the main members of the Banking School were Thomas Tooke, John Fullarton, James Wilson and J. W. Gilbart. They believed "The amount of paper notes in circulation was adequately controlled by the ordinary processes of competitive banking, and if the requirement of convertibility was maintained, could not exceed the needs of business for any appreciable length of time". Thus they opposed the requirement in the Bank Act of 1844 for a reserve requirement on banknotes.
Monetary policy in the United States is associated with interest rates and availability of credit.
The real bills doctrine says that as long as bankers lend to businessmen only against the security (collateral) of short-term 30-, 60-, or 90-day commercial paper representing claims to real goods in the process of production, the loans will be just sufficient to finance the production of goods. The doctrine seeks to have real output determine its own means of purchase without affecting prices. Under the real bills doctrine, there is only one policy role for the central bank: lending commercial banks the necessary reserves against real customer bills, which the banks offer as collateral. The term "real bills doctrine" was coined by Lloyd Mints in his 1945 book, A History of Banking Theory. The doctrine was previously known as "the commercial loan theory of banking".
References
- ↑ Nicolas Barbaroux (21 August 2013). Monetary Policy Rule in Theory and Practice: Facing the Internal Vs External Stability Dilemma. Routledge. p. 74. ISBN 978-1-135-06794-6.
- 1 2 3 4 Skaggs, Neil (1999). "Changing Views: Twentieth-Century Opinion on the Banking School-Currency School Controversy". History of Political Economy. 31 (2): 361–391. doi:10.1215/00182702-31-2-361 . Retrieved April 16, 2016.
- ↑ Houghton, John (1991). Culture and currency: Cultural bias in monetary theory and policy. Political Cultures series. Boulder and Oxford: Westview Press. ISBN 0-8133-1191-8.
- 1 2 3 Laidler, David (2000). Highlights of the Bullionist Controversy. Department of Economics, University of Western Ontario.
- ↑ B. Hilton, A Mad, Bad & Dangerous People? (Oxford 2008) p. 549 and n.
- ↑ Jacob Viner (1937). Studies In The Theory Of International Trade.
- ↑ Fonseca, Gonçalo. "The Balloonist Controversy". The New School. Archived from the original on May 11, 2016. Retrieved April 18, 2016.
- ↑ Read, Charles (2022). Calming the storms : the carry trade, the banking school and British financial crises since 1825. Cham, Switzerland. pp. 91–270. ISBN 978-3-031-11914-9. OCLC 1360456914.
{{cite book}}: CS1 maint: location missing publisher (link)