IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v63y2022icp104-111.html
   My bibliography  Save this article

Commodity money, natural values, and central banking in Ricardo

Author

Listed:
  • Costabile, Lilia

Abstract

Ricardo studied the effects of alternative institutions on natural relations and ranked alternative monetary systems according to their ability to equalise the value of money to the natural value of gold. Pure commodity money is at the top of his normative hierarchy, only surpassed by his own "perfect" system. In commodity money systems, the price level is equal to the relative price of gold for "commodities in general", and money is endogenous. The quantity theory, by contrast, comes in operation in monetary system where the gold anchor is lost or works imperfectly. The supposed contradictions of Ricardo's monetary theory disappear within the interpretative framework adopted here. This framework builds on Pasinetti's insights in the role of natural values in Classical economics; develops Ricardo's own type-of-economy approach to monetary analysis; and shows that, far from being a commodity like any other, commodity money is a specific, complex institutional system.

Suggested Citation

  • Costabile, Lilia, 2022. "Commodity money, natural values, and central banking in Ricardo," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 104-111.
    • Handle: RePEc:eee:streco:v:63:y:2022:i:c:p:104-111
    DOI: 10.1016/j.strueco.2022.09.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X22001370
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2022.09.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lilia Costabile & Gerald Epstein, 2017. "An activist revival in central banking? Lessons from the history of economic thought and central bank practice," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 24(6), pages 1416-1439, November.
    2. Thomas J Sargent, 2019. "Commodity and Token Monies," The Economic Journal, Royal Economic Society, vol. 129(619), pages 1457-1476.
    3. Angela Redish, 1993. "Anchors Aweigh: The Transition from Commodity Money to Fiat Money in Western Economies," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 777-795, November.
    4. P. Antipa & C. Chamley, 2017. "Monetary and Fiscal Policy in England during the French Wars (1793-1821)," Working papers 627, Banque de France.
    5. Olivera, Julio H G, 1970. "On Passive Money," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 805-814, Part II J.
    6. Arnon,Arie, 2011. "Monetary Theory and Policy from Hume and Smith to Wicksell," Cambridge Books, Cambridge University Press, number 9780521191135, November.
    7. Costabile, Lilia, 1983. "Natural Prices, Market Prices and Effective Demand in Malthus," Australian Economic Papers, Wiley Blackwell, vol. 22(4), pages 144-170, June.
    8. R. S. Sayers, 1953. "Ricardo's Views on Monetary Questions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 67(1), pages 30-49.
    9. Maria Cristina Marcuzzo, 2024. "Ricardo’s Theory of Money Matters," Palgrave Studies in the History of Economic Thought, in: Economic Theories, Protagonists and Facts, chapter 0, pages 81-101, Palgrave Macmillan.
    10. Thomas M. Humphrey, 1974. "The quantity theory of money : its historical evolution and role in policy debates," Economic Review, Federal Reserve Bank of Richmond, vol. 60(May), pages 2-19.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ciccone, Michele, 2022. "Some notes on Ricardo's analysis of the convergence process of the market rate of interest to the natural rate," MPRA Paper 112887, University Library of Munich, Germany.
    2. Ghislain Deleplace, 2022. "“Storm in a Teacup? The Impact of War on the English Monetary System and Thought (1797-1821)”," Post-Print hal-04429477, HAL.
    3. Ghislain Deleplace, 2023. "Tooke Versus Ricardo On The Resumption Of Convertibility In 1819-1821," Post-Print hal-04429520, HAL.
    4. Pamfili Antipa & Vincent Bignon, 2018. "Whither Economic History? Between Narratives and Quantification," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 17-36.
    5. Sylvie Diatkine, 1994. "A propos de la position de Ricardo concernant la liberté d'émission de la monnaie," Cahiers d'Économie Politique, Programme National Persée, vol. 23(1), pages 79-99.
    6. Patrick K. O’Brien & Nuno Palma, 2019. "Danger To The Old Lady Of Threadneedle Street? The Bank Restriction Act And The Regime Shift To Paper Money, 1797-18211," Working Papers 0082, Utrecht University, Centre for Global Economic History.
    7. Michael D. Bordo & William Roberds, 2022. "Central Bank Digital Currencies: An Old Tale with a New Chapter," FRB Atlanta Working Paper 2022-18, Federal Reserve Bank of Atlanta.
    8. Luis Angeles, 2020. "Four Phases in the History of Money," Working Papers 2020_24, Business School - Economics, University of Glasgow.
    9. Patrick K O'Brien & Nuno Palma, 2020. "Danger to the Old Lady of Threadneedle Street? The Bank Restriction Act and the regime shift to paper money, 1797–1821," European Review of Economic History, European Historical Economics Society, vol. 24(2), pages 390-426.
    10. Nicola Acocella-super-, 2017. "The Rise And Decline Of Economic Policy As An Autonomous Discipline: A Critical Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 661-677, July.
    11. Sissoko, Carolyn & Ishizu, Mina, 2021. "How the West India trade fostered last resort lending by the Bank of England," LSE Research Online Documents on Economics 108565, London School of Economics and Political Science, LSE Library.
    12. Maria Cristina Marcuzzo, 2024. "Ricardo’s Theory of Money Matters," Palgrave Studies in the History of Economic Thought, in: Economic Theories, Protagonists and Facts, chapter 0, pages 81-101, Palgrave Macmillan.
    13. Farley Grubb, 2017. "The Paper Money of Colonial North Carolina, 1712-1774," Working Papers 17-01, University of Delaware, Department of Economics.
    14. Fernández-Villaverde, Jesús & Sanches, Daniel, 2023. "A model of the gold standard," Journal of Economic Theory, Elsevier, vol. 214(C).
    15. David Laidler, 2013. "Professor Fisher and the quantity theory -- a significant encounter," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 20(2), pages 174-205, April.
    16. Michael D. Bordo & Marc Flandreau, 2003. "Core, Periphery, Exchange Rate Regimes, and Globalization," NBER Chapters, in: Globalization in Historical Perspective, pages 417-472, National Bureau of Economic Research, Inc.
    17. Charles A. E. Goodhart & Meinhard A. Jensen, 2015. "A Commentary on Patrizio Lainà's 'Proposals for Full-Reserve Banking: A Historical Survey from David Ricardo to Martin Wolf'," Economic Thought, World Economics Association, vol. 4(2), pages 1-20, September.
    18. Hussaini Umaru & Aguda Niyi A. & Nordiana Osagie Davies, 2018. "The Effects of Exchange Rate Volatility on Economic Growth of West African English-Speaking Countries," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(4), pages 131-143, October.
    19. Neuberger, Doris, 2018. "Kann Karl Marx die Finanzkrise 2007/08 erklären? Eine Einordnung seiner Geld- und Kredittheorie," Thuenen-Series of Applied Economic Theory 155, University of Rostock, Institute of Economics, revised 2018.
    20. Ghislain Deleplace, 2020. "Orthodox versus Unorthodox Views on Ricardo’s Theory of Money," Post-Print hal-04253395, HAL.

    More about this item

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:63:y:2022:i:c:p:104-111. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.