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Do we need a distinct monetary constitution?

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  • Horwitz, Steven

Abstract

Elements of the Chicago and Virginia traditions of political economy have rejected both competitive money production and money's politicization via post-constitutional bargaining, opting instead for constitutionalization. This paper argues that competitive money production is not subject to the pro-cyclicality that concerns constitutional political economy. It also meets the standard of predictability that motivates constitutional perspectives, although at the level of individual prices rather than the price level. An effective monetary constitution is implicit in any constitution that protects rights to property, contract, and exchange and sets limits on the democratic process.

Suggested Citation

  • Horwitz, Steven, 2011. "Do we need a distinct monetary constitution?," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 331-338.
    • Handle: RePEc:eee:jeborg:v:80:y:2011:i:2:p:331-338
    DOI: 10.1016/j.jebo.2011.07.010
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hendrickson, Joshua R. & Salter, Alexander W., 2018. "Going beyond monetary constitutions: The congruence of money and finance," The Quarterly Review of Economics and Finance, Elsevier, vol. 69(C), pages 22-28.
    2. Van Den Hauwe, Ludwig, 2017. "Monetary Constitutionalism: Some Recent Developments," MPRA Paper 83052, University Library of Munich, Germany.
    3. Salter, Alexander William & Young, Andrew T., 2018. "A theory of self-enforcing monetary constitutions with reference to the Suffolk System, 1825–1858," Journal of Economic Behavior & Organization, Elsevier, vol. 156(C), pages 13-22.
    4. Peter J. Boettke & Alexander W. Salter & Daniel J. Smith, 2018. "Money as meta-rule: Buchanan’s constitutional economics as a foundation for monetary stability," Public Choice, Springer, vol. 176(3), pages 529-555, September.
    5. Alexander William Salter, 2014. "Debt Erosion and the Market Process," Economic Affairs, Wiley Blackwell, vol. 34(3), pages 370-378, October.
    6. Gabriel J. Zanotti & Agustina Borella & Nicolás Cachanosky, 2023. "Hermeneutics and phenomenology in the social sciences: Lessons from the Austrian school of economics case," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 36(3), pages 403-415, September.
    7. Degens, Philipp, 2013. "Alternative Geldkonzepte - ein Literaturbericht," MPIfG Discussion Paper 13/1, Max Planck Institute for the Study of Societies.
    8. Alexander William Salter, 2013. "Not all NGDP Is Created Equal: A Critique of Market Monetarism," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 29(Fall 2013), pages 41-52.
    9. Cachanosky, Nicolás & Salter, Alexander W. & Savanti, Ignacio, 2022. "Can dollarization constrain a populist leader? The case of Rafael Correa in Ecuador," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 430-442.
    10. Alexander Salter, 2014. "Is there a self-enforcing monetary constitution?," Constitutional Political Economy, Springer, vol. 25(3), pages 280-300, September.
    11. Bryan P. Cutsinger, 2021. "Forced savings and political malinvestment: an application of steve horwitz’s microfoundations and macroeconomics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(2), pages 311-322, June.
    12. Paniagua Pablo, 2016. "The Stability Properties of Monetary Constitutions," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 22(2), pages 113-138, December.
    13. Mihaela IAVORSCHI & Andreea GRADINARU, 2014. "The Healthy Currency – An Alternative To Stable Currency," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6(3), pages 43-52, September.
    14. Paul Lewis & Richard E. Wagner, 2017. "New Austrian macro theory: A call for inquiry," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(1), pages 1-18, March.

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    More about this item

    Keywords

    Constitutional political economy; Monetary regimes; Free banking; inflation;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • N2 - Economic History - - Financial Markets and Institutions

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