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Ricardo’s Theory of Money Matters

In: Economic Theories, Protagonists and Facts

Author

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  • Maria Cristina Marcuzzo

    (Sapienza University of Rome)

Abstract

In this paper three common charges against Ricardo’s monetary theory are evaluated: the commodity-money fallacy, the neutrality of money and the long-period view. According to the first, Ricardo’s identification of money with gold prevented him from coming to grasp with paper-money and therefore fully understanding the properties of money. According to the second, Ricardo is the champion of the quantity theory of money and failed to see the real effects of variations in nominal variables. According to the third, Ricardo gave exclusive attention to permanent phenomena to the detriment of analysis of short-period disturbances. The paper challenges these views and provides an alternative interpretation of Ricardo’s monetary theory.

Suggested Citation

  • 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.
    • Handle: RePEc:pal:pshchp:978-3-031-63949-4_6
    DOI: 10.1007/978-3-031-63949-4_6
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    References listed on IDEAS

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    1. Barro, Robert J, 1979. "Money and the Price Level under the Gold Standard," Economic Journal, Royal Economic Society, vol. 89(353), pages 13-33, March.
    2. Roy Green, 1982. "Money, Output And Inflation In Classical Economics," Contributions to Political Economy, Cambridge Political Economy Society, vol. 1(1), pages 59-85.
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    4. repec:bla:econom:v:54:y:1987:i:215:p:367-80 is not listed on IDEAS
    5. 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.
    6. Robert L. Hetzel, 1987. "Henry Thornton: seminal monetary theorist and father of the modern central bank," Economic Review, Federal Reserve Bank of Richmond, vol. 73(Jul), pages 3-16.
    7. Pierangelo Garegnani, 2024. "The Classical Theory of Wages and the Role of Demand Schedules in the Determination of Relative Prices," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 297-303, Springer.
    8. Will E. Mason, 1977. "Winners and Losers: Some Paradoxes in Monetary History Resolved and Some Lessons Unlearned," History of Political Economy, Duke University Press, vol. 9(4), pages 476-489, Winter.
    9. Bordo, Michael David & Ellson, Richard Wayne, 1985. "A model of the classical gold standard with depletion," Journal of Monetary Economics, Elsevier, vol. 16(1), pages 109-120, July.
    10. Fremling, Gertrud M., 1986. "A specie-flow model of the gold standard," Journal of International Money and Finance, Elsevier, vol. 5(1), pages 37-55, March.
    11. Thomas M. Humphrey, 1990. "Ricardo versus Thornton on the appropriate monetary response to supply shocks," Economic Review, Federal Reserve Bank of Richmond, vol. 76(Nov), pages 18-24.
    12. Maria Cristina Marcuzzo & Annalisa Rosselli, 1994. "The standard commodity and the standard of money," Cahiers d'Économie Politique, Programme National Persée, vol. 23(1), pages 19-31.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Talknice Saungweme & Nicholas M. Odhiambo, 2021. "Inflation and Economic Growth in Kenya: An Empirical Examination," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(3), pages 1-25, September.
    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. T. Saungweme & N.M. Odhiambo, 2021. "Inflation and Economic Growth in Kenya: An Empirical Examination," Working Papers AESRI-2021-13, African Economic and Social Research Institute (AESRI), revised Oct 2021.
    4. Ghislain Deleplace, 2019. "“Orthodox versus Unorthodox Views on Ricardo’s Theory of Money”," Post-Print hal-04429068, HAL.
    5. Talknice Saungweme & Nicholas M. Odhiambo, "undated". "Inflation And Economic Growth In Kenya: An Empirical Examination," Working Papers AESRI04, African Economic and Social Research Institute (AESRI).
    6. Costabile, Lilia, 2022. "Commodity money, natural values, and central banking in Ricardo," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 104-111.
    7. Ghislain Deleplace, 2020. "Orthodox versus Unorthodox Views on Ricardo’s Theory of Money," Post-Print hal-04253395, HAL.
    8. Talknice Saungweme & Nicholas M. Odhiambo, 2021. "Inflation and Economic Growth in Kenya: An Empirical Examination," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(3), pages 1-25, September.
    9. Annalisa Rosselli, 1999. "The Origin of the Political Economy of Money," Review of Political Economy, Taylor & Francis Journals, vol. 11(4), pages 443-454.
    10. Talknice Saungweme & Nicholas M. Odhiambo, 2021. "Inflation and Economic Growth in Kenya: An Empirical Examination," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(3), pages 1-25, September.
    11. David Andrews, 2000. "Keynes, Ricardo and the classical theory of interest," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 7(2), pages 228-244.
    12. Ghislain Deleplace, 2019. "“Orthodox versus Unorthodox Views on Ricardo’s Theory of Money”," Post-Print hal-04429116, HAL.
    13. 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.

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    More about this item

    Keywords

    Ricardo; Non-neutrality of money; Standard;
    All these keywords.

    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
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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