 Monetary Disequilibrium and the Demand for Money in Ricardo and ThorntonDavid Glasner () Chapter Chapter 6 in Studies in the History of Monetary Theory, 2021, pp 135-153 from Palgrave Macmillan Abstract: Abstract This chapter explores the different explanations of Ricardo and Thornton for the depreciation of sterling after convertibility of sterling into gold was suspended during the Napoleonic Wars. Ricardo held that only overissue by the Bank of England could have caused depreciation of sterling while Thornton believed that other causes, like a bad harvest, could also cause depreciation. Applying the conditions of international commodity arbitrage under the gold standard, Ricardo argued that a bad harvest could not cause depreciation of sterling. But the conclusion follows only under the implicit assumption that the demand for money is unchanged despite a bad harvest. In contrast, Thornton, anticipating Wicksell’s natural-rate theory, did not take a uniform international price level as a benchmark given the suspension of convertibility. But, like Ricardo, Thornton implicitly made the untenable assumption of unchanged demand for money. Keywords: Classical monetary theory; Quantity theory; Convertibility; Demand for money; Overissue; Natural rate of interest (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:pshchp:978-3-030-83426-5_6 Ordering information: This item can be ordered from DOI: 10.1007/978-3-030-83426-5_6 Access Statistics for this chapter More chapters in Palgrave Studies in the History of Economic Thought from Palgrave Macmillan |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.