Why Good Money Has a Solid Anchor

Brendan Brown (brendan7brown@outlook.com) and Robert Pringle (27rpringle@gmail.com)
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Brendan Brown: Hudson Institute
Robert Pringle: Central Banking Publications

Chapter Chapter 5 in A Guide to Good Money, 2022, pp 67-80 from Springer

Abstract: Abstract Is there a wonder mechanism which can foster the qualities of good money? The short answer is yes—a solid anchor. This is a device which protects money from storms of monetary inflation, possibly violent. A solid anchor achieves this by securely constraining the supply of money in relation to the demand for it. In this chapter, the authors analyse the concept of a monetary anchor in general. A good anchor can be applied either in a fiat money regime or, alternatively, in a commodity/real asset based regime.

Keywords: Anchors in history; Business cycle fluctuations under solid anchoring; Concept of monetary anchor; Constitutional money rules; Convertibility of money; Fixed money supply inconsistent with solid anchoring; Foreign currency anchors; High-powered money role in anchoring; Inflation targeting means anchor-less money; Mild deflation or price stability as aim?; Principles of anchoring; Solid anchor designs (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-06041-0_5

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DOI: 10.1007/978-3-031-06041-0_5

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