Monday, March 18, 2013

The Classical Gold Standard Era was a Myth

UPDATED

And it is very easy to prove that it was a myth. By “myth” of course, what I mean is that it is a myth that the real world Classical Gold Standard (from 1880 to 1914) was
(1) a system with a pure metallic standard, or
(2) one where most money was gold, and where all credit money was backed up by gold.
In reality, credit money (mostly unbacked by metal) was the predominant form of money through the entire period of the Classical Gold Standard.

Of course, I am not denying that gold was the inelastic monetary base in this period, that monetary units were defined in terms of grains of gold, and that the real world system could impose a contractionary and deflationary bias on the nations that used it.

The Classical Gold Standard era is usually dated from 1880 to 1914. Some economists and historians prefer a broader time period from 1821 to 1914, but this seems quite misleading for a number of reasons. During the early 19th century, silver was more important than gold as a commodity money base (Triffin 1985: 153). Right down to the early 19th century most nations were on a bimetallic standard that was based not on gold but on silver (Bordo 1999: 158).

Although the gold standard was adopted by different nations at different times, it was not until 1880 that the majority of nations were on some form of gold standard (Bordo 1999: 159).

But what was the actual composition of the broad money supply in various nations on the gold standard in the 1880 to 1914 era? What percentage of the total money stock was actually gold?

Let us look at the data. Many might be surprised.

Below are pie charts showing the composition of the broad money supply in the following 11 nations for 1885 and 1913: the United States, Canada, the United Kingdom, France, Germany, Italy, Netherlands, Belgium, Sweden, Switzerland, and Japan.

In other words, we have data here on most of the Western world in the 19th century with the emerging industrial economy of Japan. The data are taken from Triffin (1985: 154, Table 8.2).

First, the year 1885. The chart below shows total money supply with component percentages of
(1) gold,
(2) silver,
(3) currency, and
(4) demand deposits.
Note that the “currency” component includes non-silver, fiduciary coinage (and, though it is not clear to me, perhaps also central bank notes). Total credit money consists of both (a) currency and (b) demand deposits, including paper currency.




Notice anything? Only years after the emergence of the international gold standard (around 1880), by 1885 67% of broad money – that is, most of it – was already credit money. Demand deposits were already the largest component of the money supply.

What happened by 1913 at the end of the Classical Gold Standard? Let us look at the second chart for 1913, which again shows the total money supply composition in 11 nations.




Actual gold declined to just 10% of the money supply, and credit money accounted for the overwhelming 85% of the money stock. Demand deposit money (bank money) stood at 63% of total money supply – again the largest component and much larger than in 1885.

What happened is that fractional reserve banking was meeting most of the demand for credit money: money was mostly in the form of demand deposits and banknotes.

Money supply was elastic, and total money supply was partly endogenous and partly exogenous. The exogenous component was the base money (or monetary base) of gold and silver, and the credit money component was endogenous.

The inelastic nature of the commodity base imposed constraints on how much credit money could be created of course (which libertarians and Austrians no doubt applaud), but one wonders how much private investment was prevented and stifled because of the need to maintain gold reserves for final clearing of credit money transactions. To what extent was economic growth in the late 19th century reduced by the “barbarous relic”? Probably to some important degree, if there was significant demand for credit from businesses that was unmet by banks. (Today, as a matter of interest, many Post Keynesians would consider even base money endogenous, so that our monetary system is freed from the straitjacket of gold.)

Eventually, the gold standard system itself required new sources of base money, and banknotes of central banks came to be effectively a form of base money in many nations. Within other nations, the banknotes of the most powerful or trusted private banks no doubt also came to be used as if they were base money.

As another interesting datum, it was not just gold that was the international reserve currency: the UK pound sterling – often just banknotes of the Bank of England – was also a fundamental reserve currency in the international payments system of the 19th century.

Robert Triffin’s verdict on the 19th-century gold standard is significant:
“[the] reconciliation of high rates of economic growth with exchange-rate and gold-price stability [in the 19th century] was made possible … by the rapid growth and proper management of bank money, and could hardly have been achieved under the purely, or predominantly, metallic systems of money creation characteristic of the previous centuries. Finally, the term ‘gold standard’ could hardly be applied to the period as a whole, in view of the overwhelming dominance of silver during its first decades, and of bank money during the latter ones. All in all, the nineteenth century could be far more accurately described as the century of an emerging and growing credit-money standard, and of the euthanasia of gold and silver moneys, rather than as the century of the gold standard.” (Triffin 1985: 153).
Triffin (1985: 152) estimates that in 1800 bank money or credit money probably constituted less than 33% of the money supply. By 1913, paper currency and bank deposits accounted for 83% of overall currency circulation in the world, and actual gold itself for not much more than 10%.

The final collapse of the gold standard in the 1930s – after the disastrous attempt to restore it via the gold exchange standard – was the understandable culmination of a process already well underway in the late 19th century: the increasing irrelevance of gold and its shrinking role as a form of money.

Finally, the graph below shows the rise in the money supply from 1885 to 1913.




As we can see, the gold standard did not stop the continuous, annual expansion in the money supply.

Nor did it stop the remarkable expansion of the credit money component of national money stocks, which came to dominate national money supplies by 1913.

In short, the gold standard was a myth.


BIBLIOGRAPHY

Bordo, Michael D. 1999. The Gold Standard and Related Regimes. Cambridge University Press, Cambridge.

Triffin, R. 1985. “Myth and Realities of the Gold Standard,” in B. Eichengreen and M. Flandreau (eds.), The Gold Standard in Theory and History. Routledge, London and New York. 140–161.

46 comments:

  1. Your definition of "gold standard" is an odd one. To set a standard is to define what constitutes a nation's measuring stick. Using technical speak, setting a standard means to define the unit of account by reference to some quantity x of a medium of account.

    For instance, England's standard was silver for much of the last 800 years. The pound was formally defined as 5400 grains of silver. That gold, copper, and paper media circulated at the same time as silver coin over that entire era doesn't detract from the fact that the English standard was still a silver standard.

    The definition was formally changed in 1816, but the fact that paper, silver tokens, and base metal tokens circulated along with gold after then doesn't invalidate that Britain was operating on a gold standard till WWI. The pound was defined as 113 grains of gold over that entire period... a gold standard.

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    1. (1) that you can define the gold standard in terms of how a monetary unit was set at so many grains of gold is something I do not deny.

      (2) But if you cannot see the argument above, which is that, when your actual commodity that sets the money standard falls to just 10% of the total money stock, something is fishy about calling the monetary system a "gold" standard, then you've obviously missed its point completely.

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    2. There's nothing fishy about it. China is effectively on a US dollar standard. A renminbi is defined as a certain quantity x USD. No USD circulates in China, yet that doesn't prevent China from being on a dollar standard.

      In any case, my guess is that this post is more about trying to take jabs at Austrians rather than pursuing non-denominational economics, in which case I'm signing off.

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    3. China controls the yuan/dollar exchange rate. The yuan is pegged to the dollar for the purposes of international payments and its mercantilist policy of undervalued currency for its exports.

      But within China the renminbi is the legal currency. Do people in China demand US dollars for final clearing of monetary transactions? No. They use renminbi and the source of renminbi is the People's Bank of China.

      Your analogy is misguided.

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    4. In a gold standard systems where banks operate with a reserve of n% and issue convertible paper currency and keep all the gold in their vaults - then people would likely never demand to hold gold for monetary purposes.

      Gold would make up the monetary base but 0% of circulating money.

      Would the gold standard be a myth in this case ?

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    5. Such a system where gold became a smaller and smaller % of broad money would be unsustainable, for you still need gold for final clearing.

      Eventually, it would require new sources of base money -- either banknotes of a central bank or banknotes of the most powerful or trusted private bank.

      That is what happened in the 19th century: central banknotes came to be effectively a form of base money.

      As Triffin says, of the 19th century, "[the] reconciliation of high rates of economic growth with exchange-rate and gold-price stability [in the 19th century] was made possible … by the rapid growth and proper management of bank money, and could hardly have been achieved under the purely, or predominantly, metallic systems of money creation characteristic of the previous centuries."

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    6. "Such a system where gold became a smaller and smaller % of broad money would be unsustainable, for you still need gold for final clearing. "

      There would be no need for the % to get smaller - the reserve ratio could stay fixed over time. If output increases faster than gold was added to reserves the price level falls - as actually happened in the latter part of the 19th century.

      I don't dis-agree that to a limited extent non gold-backed money also played a role during the "gold-standard" era - but I would wager that most of what you show in your charts is just credit money backed by gold or silver and lent out under fractional reserve. Do you have any data that suggests otherwise ?



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    7. To clarify my last comment:

      In theory there is no reason why the reserve ratio needs to change over time, but in practice during the 19th century when FRB was maturing and expanding then the amount and proportion of credit money also expanded quite rapidly as a result.

      When you say "The exogenous component was the base money (or monetary base) of gold and silver, and the credit money component was endogenous." then as long as you recognize that the credit money is built on a base of commodity money (or other things that can play the role of commodity money) then I'm not sure we disagree on this.

      Whether you call this era "the gold standard" or not is just a question of a definition of little importance.





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  2. One of your most important posts ever, LK. I've long suspected that this was the case. Nice to see the data.

    "[A growing capitalist economy] requires, above all, a monetary and banking system that enables capital investment to increase in response to inducements, so as to generate the savings required to finance additional investment out of the addition to production and incomes. This is the real significance of the invention of paper money and of credit creation through the banking system. It provided the pre-condition of self-sustained growth. With a purely metallic currency, where the supply of money is given irrespective of the demand for credit, the ability of the system to expand in response to profit opportunities is far more narrowly confined."

    -- Nicholas Kaldor, "The Irrelevance of Equilibrium Economics", 1972 [!].

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    1. Thanks for this comment, Philip.

      Curiously, I have Kaldor's "The Irrelevance of Equilibrium Economics" on my desk right now.

      I am planning a post in it!

      Delete
  3. @ JP Koning

    Precisely what LK is saying. We might say that the gold standard rules themselves are endogenous. When the money supply needs to grow and begins to outpace the gold stock, the interest rate starts to rise. The response? Lower the gold reserve requirments, of course!

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    1. "When the money supply needs to grow and begins to outpace the gold stock, the interest rate starts to rise."

      In which case can you explain why during the latter part of the 19th century when the economy was growing fast and we were on a gold standard interest rates were consistently low and falling?

      http://www.ritholtz.com/blog/wp-content/uploads/2010/08/1790-Present.gif

      Also can you supply any data that shows that reserve requirement were trending downwards during that time ?

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    2. Your graph shows the yield on 10 year US bonds, not bank interest rates.

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    3. It seems unlikely that bank rates moved in the opposite direction, but fair enough.

      In which case can you provide any evidence that interest rates and reserve requirements moved in a way consistent with Pilkington's claims during this era ?

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    4. philip pilkingtonMarch 18, 2013 at 9:14 AM

      I would assume that they were constantly rejigging the reserve rules. That way the pressure on the gold reserveswas mitigated and interest rates stayed low. Perfectly in keeping with my argument and
      LK's stats.

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    5. The other mechanism was, I assume, that

      (1) the banknotes of central banks came to be effectively a form of base money and reserves, and

      (2) the banknotes of the most powerful or trusted private banks being used as if they were base money too in final clearing without conversion into gold.

      In nations without a central bank, e.g., Canada, mechanism (2) was obviously the main one: in Canada's case, the banknotes of the “Bank of Montreal” (a sort of de facto central bank, although a private commercial one) were probably being used as reserves.

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    6. Aren't they just two different ways of saying "rejigging the reserve rules", LK? My point was that the banks came up with ad hoc rule changes to relieve pressure on gold reserves.

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  4. LK, it's a fascinating paper. Although most of the paper is about Young's argument regarding increasing returns to scale, what Kaldor seems to be doing is laying out a whole new type of theory. Its a theory that is centered on stocks and flows and their interaction -- where market makers/merchants together with excess factory capacity in their allowing stock build-ups (of inventories/productive capacity) that accomodate higher/lower flow rates ensure the smooth functioning of the system. The flexible credit system then accomodates the turnover of the whole thing.

    In many ways it resembles Marx's analysis in Capital Volume II. And I think that Kaldor got this third-hand through Joan Robinson. It's modern day manifestation are the Godley/Lavoie monetary models that include inventory accumulation as an extremely important aspect of how capitalist economies function -- and, naturally, allow for endoegnous money.

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  5. What defined the gold standard was the fact that currencies were pegged to a specific amount of gold. The fact that gold actually made up a relatively small part of the money supply merely simply shows that fractional reserve banking was in place - all that credit money was redeemable upon demand for gold.

    The existence of the gold standard restricted governments ability to inflate their currency and it was not uncommon for governments to take their currencies off the standard when they needed finance without raising taxation. This was the reason that the gold-standard was abandoned around the time of ww2.



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    1. (1) That a gold standard -- while governments decided to adhere to it -- trended to prevent the use of fiat money is true. But the gold standard was implemented by governments. It was made legal by government law.

      And it provoked serious opposition -- especially in the US -- from people who wanted monetised silver.

      (2) the gold standard did not stop the rise of credit money created by the private banking sector, and the fact that gold fell to just 10% of total money supply by 1913 indicates that the system was unsustainable. It was clearly on the path to crisis before WWI.

      Also, it did not stop experiments with fiat money in, for example, the US in its issuing of greenbacks.

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    2. LK,
      Bob
      Roddis ramble comment on Lars Syll- Gold – a really bad idea http://larspsyll.wordpress.com/2013/06/18/gold-a-really-bad-idea-2/#comment-5471 like this:

      "The “progressive” and Keynesian paradigms are collapsing for many reasons but the most important reason is that their advocates cannot bear to even gaze superficially upon their opponents’ viewpoints. As even uber-Keynesian “Lord Keynes” has noted, “The Classical Gold Standard Era was a Myth”.
      Further, it was precisely that period of fractional reserve lending with somewhat of a gold backing that is the subject of utter disdain and the central focus of the original Austrian Business Cycle Theory. The Austrians are completely familiar with the problems caused by this system. Your post is completely dishonest by insinuating that “goldbugs” have never noticed or even thought about these problems.
      Your Keynesian paradigm is imploding and you need to employ completely dishonest “arguments” to support your silly and baseless points because you recognize that you cannot refute the Austrians on the merits"

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    3. Ha ha.Thank you LK! Your effort to educate our Roddis is much appreciated! And he don´t like or understand market clearing prices there buyers and sellers agree on a price to reflect supply and demand?Huh? I am afraid our Roddis is a secret central planner in disguise??? Anyway,it´s clear by now he haven´t read or understood Hayek´s Price and Production!!

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  6. I don't deny that their were many tensions during the period when commodity-backed money was common - I think the US had a dual gold/silver standard during the 19th century anyway, right ?

    I do think that to say that "The Classical Gold Standard Era was a Myth" is a massive over-statement though - as it a matter of historic record that major economies did indeed tie their currencies to gold during that time - and this had a major influence on how economic policy was conducted.

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  7. I think government bonds (state+federal) were also an important bank asset during this period. Shouldn't they also be counted as essentially a form of "base money" (used by banks)?

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  8. Under the gold standard, and largely because of the gold standard, the capitalist world endured eight different deflationary slumps severe enough to be called “depressions.” By Dale Pierce, New Economic Perspectives | News Analysis

    http://www.truth-out.org/news/item/15150-what-is-modern-monetary-theory-or-mmt

    Thanks to this post by LK, we never have to tolerate such nonsense from the MMTers ever again.

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    1. First, the myth exploded above is the idea that there was a pure metallic standard or the idea that most money was gold. At the same time, there is no denying that the system that did exist had a contractionary bias.

      The fact is that the commodity base was inelastic and undoubtedly caused instability and stifled investment (as said above), so Pierce is not wrong about the REAL WORLD standard.

      A gold standard with a greater metallic component and more inelastic money supply would have been much worse than the one that did exist.

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    2. Even if the gold standard wasn't working as planned the 19th century banking system had no Fed. So, bank runs were common and financial crises spread to the real economy much faster.

      No need for the gold standard to be having a significant effect to explain why a primitive banking system might be prone to crisis. Gold standard regimes certainly do make bank runs more risky because people might want their gold and you can't rejig the rules fast enough to accommodate this.

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    3. "At the same time, there is no denying that the system that did exist had a contractionary bias."

      That is just your theory that it is subsequent monetary contradictions that are the cause for the recessions that are associated with monetary contractions.

      Inelastic currency does NOT "stifle investment." It puts investment along a different pattern, one closer to consumer time preferences.

      Most people would love to have the rate of real growth during the late 19th century, right now.

      If the real world standard was not a gold standard, then the gold standard cannot be blamed for the depressions!

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    4. (1) If FR banks fold and people lose savings in the form of demand demands, then this -- in your view -- does not contract demand for goods and services?

      (2) Investment is financed by monetary credit. If credit demand was unmet by an inelastic supply, it follows that investment was stifled under the 19th century, real world gold standard.

      (3) So you're saying that a *real* gold standard would have been one with pure gold or, say, where all credit money was only ever backed up by gold?

      If so, (2) applies and you are wrong.

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    5. Freshly Squeezed CynicMarch 18, 2013 at 10:03 PM

      "Most people would love to have the rate of real growth during the late 19th century, right now."

      LK has previously noted that much of the late 19th century (much of the 1870s and 1890s), in the US at least, had low or declining rates of growth. Probably due to financial panics.

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    6. In fact, there is plenty of comparative historical data (either estimates or more solid data from after 1945) on real GDP per capita in the OECD:

      1700–1820 – 0.2%
      1820–1913 – 1.2%
      1919–1940 – 1.9%
      1950–1973 – 4.9%
      1973–1990 – 2.5%

      Davidson, P. 1999. “Global Employment and Open Economy Macroeconomics,” in J. Deprez and J. T. Harvey (eds), Foundations of International Economics: Post-Keynesian Perspectives. Routledge, London and New York. 9–34, at p. 22.

      Notice how the gold standard era (defined in most generous terms from 1820-1913) was inferior to every era after it.

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  9. So Rothbard was wrong again? You don't say!

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  10. Some of the reactions on here have been beyond amusing.

    When Ron Paul gets elected *snickers* he should abolish paper dollars and replace them with gold-infused dollar coins. Then every citizen should be given the option of purchasing as special "purity testing kit" to ensure that the Sovereign isn't clipping the currency. Then and only then will we be on our way to true Liberty!

    The world and the economy are complex places. But who said we couldn't do without simple solutions?

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  11. Money supply was always endogenous despite what form the money had. Continuous tesauration, precious metals mining and international money flows all changed the amount of coin in circulation. Mercantilists often decryed the tendency of bankers, merchants and sovereigns to hoard the coin, retracting it from circulation.

    Braudel provides evidence that the limited or plentiful supply of liquid money (for example, silver coin) didn't even determine the business activity. The credit instruments were plentiful and compensated for the lack of coin - the flows of silver and gold mostly shaped the long-distance trade. On the other hand, even the abundance of precious metals wasn't always that useful at the time when there weren't that many opportunities to invest...

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  12. Re-posted

    "Real per capita gdp growth is not the same as real median WAGES,
    LK. The two are not the same thing. Do you have reliable data? You said it yourself, the data we have is iffy at best. i could just as easily choose Romer, over Balke and Gordon, or vice versa.
    Second, if it be the case that growth was lower, it probably reflects horrible DEMAND side policies. I am no Austrian, nor am I a fan of the gold standard, which is deflationary in the bad sense as well as the good. But, there was no need for "other" social democratic policies.
    thirdly, lower us real per capita gdp growth, 1.6% versus 4, probably reflects increased immigration. The doors were open during the nineteenth century whereas they were RELATIVELY closed during the so called Golden Age of Capitalism.

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    1. (1) Yes, "real per capita gdp growth is not the same as real median wages". Have I denied this above?

      (2) Immigration has either been much the same or higher from 1960-2013 than the late 19th century (1850-1900).

      http://www.fairus.org/facts/us_laws#





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  13. Just wanted to let you know, that I agree on the assertion that the classical "gold standard era" wasn't really a gold standard at all.

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  14. In fact the way to conduct monetary policy with a gold or a silver standard, even in the absence of a CB, is to change the gold/silver price. Upward to expand credit money in circulation, downward to contract it. This is better than the ridiculous policy of interest rate cutting, which fails at the zero lower bound. the price of gold and silver can up go technically to infinity, hence government would in theory have no problems stimulating the economy.

    I blame the depressions of the 19th century, in the US., Canada, Britain, and Australia, on GOVERNMENT, specifically for the fixed price of gold and silver

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    1. Are you saying that ALL recessions in the 19th century in the US, Canada, Britain, and Australia were caused by the fixed price of gold and silver?

      That is utterly ridiculous.

      So no recessions were ever caused by collapsing asset bubbles and financial panics?

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  15. La era del patrón oro o plata, me da lo mismo y lo mismo me da, ha durado 400 años adC y XVIII siglos dC. O sea que su teoría sobre el XIX es cierta, pero su comprensión de lo que es el Capitalismo no.

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  16. "Are you saying that ALL recessions in the 19th century in the US, Canada, Britain, and Australia were caused by the fixed price of gold and silver?

    That is utterly ridiculous.

    So no recessions were ever caused by collapsing asset bubbles and financial panics?"


    They might have been STARTED by bubbles bursting and by financial panics, but those by themselves don't affect the broader economy if the government actually does its job and maintains ngdp growth. look at 1929, and 1987 in America,. Do you remember a second great depression after 1987? Of course not. Do you also remember the Great Recession starting after the Internet Bubble? Again no. Whatever else you want to say about Alan Greenspan, he was always quick, much quicker than Bernanke, to maintain liquidity even Before the real economy plummeted.


    " Immigration has either been much the same or higher from 1960-2013 than the late 19th century (1850-1900).

    http://www.fairus.org/facts/us_laws# "

    I think you're mixing up different eras in the 20th century, and thats biasing your data.. the neoliberal era saw higher immigration than the Golden Age of Capitalism, which started in 1946, NOT 1960.

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    1. (1) If by NGDP targeting you mean expand base money by the % you want GDP to grow by, this is just other monetarist "pushing on a string" solution.

      You might stave off financial collapse that way, but if expectations are shocked and demand for credit collapses, it is virtually useless for expanding private investment.

      Furthermore, how could 19th century governments expand base money when they were forced to use scarce gold? It is precisely fiat money that is required to allow this type of intervention to work smoothly and reliably.

      (2) Yet even the neoliberal era had higher real per capita GDP growth rates than the gold standard days.

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  17. "Furthermore, how could 19th century governments expand base money when they were forced to use scarce gold? It is precisely fiat money that is required to allow this type of intervention to work smoothly and reliably."

    {Sigh.} I provided you with a mechanism. Given that the gold standard era was a mix a of fiat money and gold, and given that governments had the power to define the smallest unit of commodity money, a good way to expand money would be to raise the price of gold/silver in a financial panic in terms of credit money. For example, suppose an ounce of gold was worth ten pounds in England, and five in America. A financial panic would see the Treasury departments of both countries RAISE the gold price, thus creating more money in effect. Back then one had to unfortunately work with the "mystique" of the gold standard" My solution would have been the cheapest most effective way to maintain demand back then.

    "(1) If by NGDP targeting you mean expand base money by the % you want GDP to grow by, this is just other monetarist "pushing on a string" solution.

    You might stave off financial collapse that way, but if expectations are shocked and demand for credit collapses, it is virtually useless for expanding private investment."


    Really? Do you deny that central banks have the power to pay any price they wish for any assets they wish? i don't know the rules in the UK, but in the U.S. the Fed has the power to buy anything it wants, at whatever bid it wants. If it wants to set market bond yields below zero, it can. It can pay 12 trillion for ten trillion dollars worth of mortgages, thus setting interests rates at -20% Banks COULD PAY borrowers a fee, say 4 percent, for the privilege of accepting a loan from them! Those banks could sell the securitized loan to the Fed and still make a profit.
    It is truly amazing to read Keynesians skeptical of monetary policy. You have to deny all sorts of obvious truths, and perform mind boggling mental contortions in your mind. If your position was true, LK, then The Fed could buy all the U.S. gov debt IN THE WORLD, all 13 trillion, with no effect on aggregate demand, and even if it were so, and it would still be something worth doing because it would be an amazing free lunch. (The same goes for private debt.)

    Oh, and on NGDP targeting, read Scott Sumner, Nick Rowe, lars Svensson, people much smarter than I am, to explain things. I disagree with some of the things they have to say, for example, I think central banks have to buy tens of trillions to expand NGDP, or it at least credibly threaten to do so to change expectations. whereas they think all a CB has to do is announce a change in targets. But the focus on NGDP which is a measure of MV or PY. or just plain aggregate spending, is the right path to take. Todays monetarists AGREE with Keynes, that spending and investment drives the economy, not just plain M1, M2, or M3. They're just not as interventionist as Keynes. They prefer the light hand of government, rather than the stronger hand.

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  18. "the Fed has the power to buy anything it wants, at whatever bid it wants."

    This is completely untrue. There are strict limits on what the Fed can purchase and what it can pay for them

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  19. The Socialist Myth of the Greedy Banker & the Gold Standard


    http://iakal.wordpress.com/2014/02/24/the-socialist-myth-of-the-greedy-banker-the-gold-standard/

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  20. The Gold Standard Before World War- Marcello de Cecco
    https://www.youtube.com/watch?v=HoxLJI0_jmY
    " Marcello de Cecco is one of the world’s most distinguished economic historians. His The International Gold Standard: Money and Empire (2nd ed; New York: St. Martin’s Press, 1984) is a classic, but he is also the author of many articles and other books. The article on the Eurozone crisis below is vintage de Cecco in its deft use of economic history to illuminate contemporary economic facts and controversies. The Institute for New Economic Thinking is pleased to present it here, but we are even more delighted to make public several hours of videos Professor de Cecco made with the Institute's Director of Research Thomas Ferguson in Milan in the summer of 2014. These videos cover not only Dr. de Cecco’s seminal research on the international gold standard, but his views on the international monetary system between the wars, the formation of the Bretton Woods system, and its breakdown – all topics on which Dr. de Cecco has written copiously. The videos also treat many topics less frequently discussed in the Anglo-Saxon literature, including French and Italian economic history.

    Marcello de Cecco studied at Cambridge and the University of Chicago; he was a fellow at the Institute for Advanced Study, Princeton and at the WissenschaftsKolleg zu Berlin and held the Giannini Chair at UC Berkeley, among many other honors. He is also a Visiting Professor at LUISS, Rome."

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