Simon Newcomb’s monetary theory: a reappraisal

Sofia Valeonti

The European Journal of the History of Economic Thought, 2020, vol. 27, issue 6, 837-852

Abstract: Whereas Simon Newcomb formulated the equation of exchange, he rejected the causality and the proportionality postulates of the quantity theory in some cases. To solve this puzzle, this paper relies on the distinction between the classical theory of money and the quantity theory of money and shows that, according to Newcomb, the quantity theory applied only for inconvertible paper money, while metallic money and convertible bank issues were regulated by different mechanisms. Understanding Newcomb’s distinction between the different types of issues also sheds light on his stance in the monetary debate of the U.S. Reconstruction period.

Date: 2020
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DOI: 10.1080/09672567.2020.1790623

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