Hostname: page-component-76fb5796d-dfsvx Total loading time: 0 Render date: 2024-04-27T17:45:16.432Z Has data issue: false hasContentIssue false
  • English
  • Français

AMERICAN QUANTITY THEORISTS PRIOR TO IRVING FISHER’S THE PURCHASING POWER OF MONEY

Published online by Cambridge University Press:  10 May 2013

JÉRÔME DE BOYER DES ROCHES  and
REBECA GOMEZ BETANCOURT
Get access Rights & Permissions [Opens in a new window]

Abstract

The aim of this paper is to analyze the state of the quantity theory in the United States prior to the publication of Irving Fisher’s The Purchasing Power of Money in 1911. We start by presenting the participants in the monetary debate. Next, we analyze the controversies regarding prices, purchasing power of money, and credit, prior to the Gold Standard Act of 1900, in particular the opposing views of Francis Amasa Walker and James Laurence Laughlin. We then go on to study of the restatement of the quantity theory at the beginning of the twentieth century, through the introduction of credit in the analysis and the statistical tests of the exchange equations. Finally, we study the problems and management of the gold standard, focusing on the elasticity of money supply, the characteristics of the gold exchange standard, and the contrast between the fixed price of gold and its fluctuating purchasing power. We show the improvement of the quantity theory and the new issues that emerged from the rich and original American monetary debate, prior to the publication in 1911 of Fisher’s book.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 35 , Issue 2 , June 2013 , pp. 135 - 152
Copyright
Copyright © The History of Economics Society 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Andrew, A. Piatt. 1905. “Credit and the Value of Money.” Publications of the American Economic Association Third series (10): 377–383.Google Scholar
Andrew, A. Piatt. 1906. “The Influence of Crops on Business in America.” Quarterly Journal of Economics 20 (May): 323–353.Google Scholar
Bohm-Bawerk, Eugen. 1889. The Positive Theory of Capital. Translated by William Smart. London, 1891.Google Scholar
de Boyer des Roches, Jérôme. 2007. “Cause and Effects in the Gold Points Mechanism: A Criticism of Ricardo’s Criticism of Thornton.” The European Journal of the History of Economic Thought 14 (1): 25–53Google Scholar
de Boyer des Roches, Jérôme. 2013. “Bank Liquidity Risk from John Law (1705) to Walter Bagehot (1873).” The European Journal of the History of Economic Thought 20, 3 (Forthcoming Aug.).Google Scholar
de Boyer des Roches, Jérôme, and Betancourt, Rebeca Gomez. 2010. “How Did the US Monetary System Work under the National Banking System (1863–1913)?” Paper presented at the 14th Annual Conference of the European Society for the History of Economic Thought, University of Amsterdam.Google Scholar
de Boyer des Roches, Jérôme, and Betancourt, Rebeca Gomez. 2013. “Origins and developments of Fisher Compensated Dollar Plan.” The European Journal of the History of Economic Thought. 20, 2 (Forthcoming Apr.).Google Scholar
Clow, Frederick R. 1903. “The Quantity Theory and Its Critics.” Journal of Political Economy 11, 4(Sept.): 594–620.Google Scholar
Conant, Charles A. 1904. “What Determines the Value of Money.” The Quarterly Journal of Economics 18, 4(Aug.): 551–569.Google Scholar
Conant, Charles A. 1909. “The Gold Exchange Standard in the Light of Experience.” The Economic Journal 19, 74(June): 190–200.Google Scholar
Debreu, Gérard. 1959. Theory of Value, An Axiomatic Analysis of Economic Equilibrium. New Haven and London: Yale University Press.Google Scholar
Dewey, Davis Rich. 1903. Financial History of the United States. New York: Longmans Green & Co.Google Scholar
Dimand, Robert W. 2000. “Irving Fisher and the Quantity Theory of Money: The Last Phase.” Journal of the History of Economic Thought 3: 329–348.Google Scholar
Dimand, Robert W. 2003. “Competing Visions for The US Monetary System, 1907–1913: The Quest for an Elastic Currency and the Rejection of Fisher’s Compensated Dollar Rule for Price Stability.” Cahiers d’Economie Politique 45: 101–121.Google Scholar
Dunbar, Charles Franklin. 1904. Economic Essays. Edited by Sprague, O. M. W.. New York: The Macmillan Company.Google Scholar
des Essars, Pierre. 1895. “La Vitesse de la Circulation de la Monnaie.” Journal de la Société statistique de Paris XXXVI (Avril): 143–151.Google Scholar
Fisher, Irving. 1892. “Mathematical Investigations in the Theory and Value of Prices.” Transactions of the Connecticut Academy of Arts and Science, Vol. IX.: 1–124.Google Scholar
Fisher, Irving. 1894. “The Mechanics of Bimetallism.” The Economic Journal IV: 527–537.Google Scholar
Fisher, Irving. 1896. “Appreciation and Interest.” American Economic Association XI (4): 331–442.Google Scholar
Fisher, Irving. 1897. “The Role of Capital in Economic Theory.” The Economic Journal 7, 28(Dec.): 511–537.Google Scholar
Fisher, Irving. 1997. The Works of Irving Fisher.Fourteen volumes, . Edited by Barber, William, assisted by Dimand, Robert and Foster, Kevin. Consulting editor James Tobin. London: Pickering & Chatto.Google Scholar
Fisher, Irving, with Brown, Harry Gunnison. [1911] 1913. The Purchasing Power of Money. Its Determination and Relation to Credit, Interest and Crises. New York: The Macmillan Company.Google Scholar
Foville, Alfred de. 1896. “La Théorie Quantitative et les Prix.” L’Economiste français XXIV (Avril): 451–452.Google Scholar
Fisher, Willard. 1895. “Money and Credit Paper in the Modern Market.” The Journal of Political Economy 3, 4(Sept.): 391–413.Google Scholar
Gomez Betancourt, Rebeca. 2008. “E.W. Kemmerer Money Theorist and Money Doctor.” PhD diss., University of Paris I. Pantheon-Sorbonne.Google Scholar
Gomez Betancourt, Rebeca. 2009. “From the Gold Exchange Standard to the Gold Standard: The Crucial Role of E.W. Kemmerer.” Paper presented at the History of Economics Society meeting, York University, Canada.Google Scholar
Gomez Betancourt, Rebeca. 2010a. “Edwin Walter Kemmerer’s Contribution to Quantity Theory of Money.” European Journal of the History of Economic Thought 17, 1(Feb.): 115–140.Google Scholar
Gomez Betancourt, Rebeca. 2010b. “Edwin Walter Kemmerer and the Origins of the Federal Reserve System.” Journal of the History of Economic Thought 32, 4(Dec.): 445–470.CrossRefGoogle Scholar
Hadley, A. T. 1896. Economics. New York: Putnam.Google Scholar
Hardy, Sarah McLean. 1895. “The Quantity Theory of Money and Prices, 1860–1891.” The Journal of Political Economy 3, 2(March): 145–168.Google Scholar
Hegeland, Hugo. [1951] 1969. The Quantity Theory of Money. New York: A.M. Kelley.Google Scholar
Helm, Elijah. 1894. The Joint Standard: A Plain Exposition of Monetary Principles and of the Monetary Controversy. New York: Macmillan.Google Scholar
Humphrey, Thomas. 1984. “Algebraic Quantity Equations before Fisher and Pigou.” Federal Reserve Bank of Richmond Economic Review 70: 13–22.Google Scholar
Humphrey, Thomas. 1993. “The Origins of Velocity Functions.” Federal Reserve Bank of Richmond Economic Quarterly 79, 4(Fall): 1–17.Google Scholar
Kemmerer, Edwin Walter. 1903a. “Money and Credit Instruments in their Relation to General Prices.” PhD diss., Cornell University.Google Scholar
Kemmerer, Edwin Walter. 1903b. “The Higgling of the Market.” The Quarterly Journal of Economics 17, 4: 670–677.Google Scholar
Kemmerer, Edwin Walter. 1904. “A Gold Standard for the Straits Settlements.” Political Science Quarterly 19, 4(Dec.): 636–649.Google Scholar
Kemmerer, Edwin Walter. 1905. “The Establishment of the Gold Exchange Standard in the Philippines.” The Quarterly Journal of Economics 19, 4(Aug.): 585–609.Google Scholar
Kemmerer, Edwin Walter. 1906. “A Gold Standard for the Straits Settlements II.” Political Science Quarterly 21, 4(Dec.): 663–698.Google Scholar
Kemmerer, Edwin Walter. [1907] 1909. Money and Credit Instruments in their Relation to General Prices. New York: Henry Holt and Company. New edition, New York and London: Garland, 1983.Google Scholar
Keynes, John Maynard. 1911. “Review of Fisher, Irving, The Purchasing Power of Money (1911).” The Economic Journal 23 (Sept.): 3.Google Scholar
Kinley, David. 1904. Money. A Study of the Theory of the Medium of Exchange. New York: Greenwood Press. Reprinted New York: The Macmillan Company, 1968.Google Scholar
Kinley, David. 1905. “The Relation of the Credit System to the Value of Money.” Publications of the American Economic Association, Third Series, 6, 1, Papers and Proceedings of the Seventeenth Annual Meeting. Part I (Feb.): 84–94.Google Scholar
Kinley, David. 1910. “The Use of Credit instruments in Payments in the United States.” 61st Congress, 2nd Session. Doc. N. 399, in Reports of National Monetary Commission. Washington: Government Printing Office.Google Scholar
Laidler, David. 1991. The Gold Age of the Quantity Theory. New Jersey: Princeton University Press.Google Scholar
Laughlin, James Laurence. 1903. The Principles of Money. London: John Murray.Google Scholar
Laughlin, James Laurence. 1919. Money and Prices. New York: Charles Scribner’s Sons.Google Scholar
Lindsay, Alexander Martin. 1892. Ricardo’s Exchange Remedy: A proposal to regulate the Indian Currency by making it expand and contract automatically at fixed sterling rates, with the aid of the Silver Clause of the Bank Act. London: E. Wilson.Google Scholar
Mehrling, Perry. 1997. The Money Interest and the Public Interest: American Monetary Thought, 1920–1970. Cambridge, MA: Harvard University Press.Google Scholar
Mill, John Stuart. 1848. Principles of Political Economy. London: Longmans, Green and Co.Google Scholar
Mitchell, Wesley Clair. 1896. “The Quantity Theory of the Value of Money.” Journal of Political Economy 4, 2(March): 139–165.Google Scholar
Newcomb, Simon. 1886. Principles of Political Economy. New York: Harper.Google Scholar
Nicholson, Joseph Shield. [1888] 1903. A Treatise on Money and Essays on Monetary Problems. Sixth edition. London: Adam and Charles Black.Google Scholar
Nicholson, Joseph Shield. 1893. Principles of Political Economy. New York: Macmillan.Google Scholar
Norton, John Pease. 1902. Statistical Studies of the New York Money Market. New York: Macmillan.Google Scholar
Patinkin, Don. 1956. Money, Interest and Prices. Chicago: Row Peterson and Company.Google Scholar
Persons, Warren M. 1908. “The Quantity Theory as Tested by Kemmerer.” Quarterly Journal of Economics 22, 2(Feb.): 274–289.Google Scholar
Ricardo, David. 1951–1973. The Works and Correspondence of David Ricardo. Edited by Piero Sraffa with the collaboration of M. H. Dobb. Cambridge: Cambridge University Press.Google Scholar
Schumpeter, Joseph. 1954. History of Economic Analysis. London: George Allen and Unwin.Google Scholar
Sember, Florencia. 2010. “The Origins and Evolution of the Monetary Thought of Raúl Prebisch.” PhD diss., Universita di Macerata and Université Paris 1 Panthéon Sorbonne.Google Scholar
Skaggs, Neil. 1995. “The Methodological Roots of J. Laurence Laughlin’s Anti-quantity Theory of Money and Prices.” Journal of the History of Economic Thought 17: 1–20.CrossRefGoogle Scholar
Sprague, Oliver M. W. 1910. History of Crisis under the National Banking System. Senate Document 538 (NMC) 61st Congress, 2nd session, Washington DC, Government Printing Office. Reprint Fairfield, NJ: August M. Kelley, 1977.Google Scholar
Taussig, Frank William. 1893. The Silver Situation in the United States. New York and London: G. P. Putnam’s Sons.Google Scholar
Taussig, Frank William. 1911. Principles of Economics. New York: Macmillan.Google Scholar
Taussig, Frank William. 1917. “International Trade under Depreciated Paper: A Contribution to Theory.” The Quarterly Journal of Economics 31, 3(May): 380–403.Google Scholar
Tobin, James. 1985. “Neoclassical Theory in America: J. B. Clark and Fisher.” The American Economic Review 75, 6(Dec.): 28–38. Centennial essays and 1985 Survey of Members.Google Scholar
Viner, Jacob. 1924. Canada’s Balance of International Indebtness 1900–1913. Cambridge: Cambridge University Press.Google Scholar
Walker, Francis Amasa. 1879. Money in Its Relations to Trade and Industry. New York: Henry Holt and Company.Google Scholar
Walker, Francis Amasa. 1888. Political Economy. Third edition, revised and enlarged. New York: Henry Holt and Company.Google Scholar
Walker, Francis Amasa. 1895. “The Quantity-Theory of Money.” The Quarterly Journal of Economics 9, 4(July): 372–379.Google Scholar
Walker, Francis Amasa. 1896. International Bimetallism. New York and London: Henry Holt & Company.Google Scholar
Willis, Henry Parker. 1896. “The History and Present Application of the Quantity Theory.” Journal of Political Economy 4, 4(Sept.): 417–448.Google Scholar