IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/83741.html
   My bibliography  Save this paper

The Bullionist Controversy: Theory and New Evidence

Author

Listed:
  • Hendrickson, Joshua

Abstract

The Bullionist Controversy in the United Kingdom is one of the first debates about the determination of the price level and the exchange rate under a paper money standard. Despite the importance of the debate in the development of monetary theory, there remains little empirical evidence that uses modern, multivariate time series techniques. The evidence that does exist provides support for the Anti-Bullionist position. The purpose of this paper is to review the debate and develop a dynamic general equilibrium model that is capable of capturing key features of the 19th-century British financial system. The model is estimated using Bayesian procedures to test the competing hypotheses. The paper provides support for the Bullionist position.

Suggested Citation

  • Hendrickson, Joshua, 2015. "The Bullionist Controversy: Theory and New Evidence," MPRA Paper 83741, University Library of Munich, Germany, revised Feb 2017.
    • Handle: RePEc:pra:mprapa:83741
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/83741/1/MPRA_paper_83741.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Barro, Robert J., 1987. "Government spending, interest rates, prices, and budget deficits in the United Kingdom, 1701-1918," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 221-247, September.
    2. Neil T. Skaggs, 1995. "Henry Thornton and the Development of Classical Monetary Economics," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 1212-1227, November.
    3. Officer, Lawrence H, 2000. "The Bullionist Controversy: A Time-Series Analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 5(3), pages 197-209, July.
    4. Freeman, Scott, 1996. "The Payments System, Liquidity, and Rediscounting," American Economic Review, American Economic Association, vol. 86(5), pages 1126-1138, December.
    5. Freeman, Scott, 1996. "Clearinghouse banks and banknote over-issue," Journal of Monetary Economics, Elsevier, vol. 38(1), pages 101-115, August.
    6. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    7. David Laidler, 2000. "Highlights of the Bullionist Controversy," University of Western Ontario, Departmental Research Report Series 20002, University of Western Ontario, Department of Economics.
    8. Ricardo Lagos & Randall Wright, 2005. "A Unified Framework for Monetary Theory and Policy Analysis," Journal of Political Economy, University of Chicago Press, vol. 113(3), pages 463-484, June.
    9. Freeman, Scott, 1999. "Rediscounting under aggregate risk," Journal of Monetary Economics, Elsevier, vol. 43(1), pages 197-216, February.
    10. Norman J. Silberling, 1924. "Financial and Monetary Policy of Great Britain During the Napoleonic Wars," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 38(3), pages 397-439.
    11. Nosal, Ed & Rocheteau, Guillaume, 2011. "Money, Payments, and Liquidity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016281, April.
    12. Nachane, D M & Hatekar, N R, 1995. "The Bullionist Controversy: An Empirical Reappraisal," The Manchester School of Economic & Social Studies, University of Manchester, vol. 63(4), pages 412-425, December.
    13. Bordo, Michael D. & White, Eugene N., 1991. "A Tale of Two Currencies: British and French Finance During the Napoleonic Wars," The Journal of Economic History, Cambridge University Press, vol. 51(2), pages 303-316, June.
    14. Norman J. Silberling, 1924. "Financial and Monetary Policy of Great Britain During the Napoleonic Wars," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 38(2), pages 214-233.
    15. Lembke B., 1918. "√ a. p," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 111(1), pages 709-712, February.
    16. Antipa, P., 2013. "Fiscal Sustainability and the Value of Money: Lessons from the British Paper Pound, 1797-1821," Working papers 466, Banque de France.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nils Herger, 2017. "An empirical assessment of the Swedish Bullionist Controversy," Working Papers 17.01, Swiss National Bank, Study Center Gerzensee.
    2. Nils Herger, 2020. "An Empirical Assessment of the Swedish Bullionist Controversy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 911-936, July.
    3. Hendrickson, Joshua R., 2020. "The Riksbank, emergency finance, policy experimentation, and Sweden’s reversal of fortune," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 312-332.
    4. Carolyn Sissoko, 2022. "Becoming a central bank: The development of the Bank of England's private sector lending policies during the Restriction," Economic History Review, Economic History Society, vol. 75(2), pages 601-632, May.

    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. Hajime Tomura, 2021. "Nominal contracts and the payment system," The Japanese Economic Review, Springer, vol. 72(2), pages 185-216, April.
    2. Daniel Sanches, 2016. "On the Inherent Instability of Private Money," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 20, pages 198-214, April.
    3. Allen Head & Junfeng Qiu, 2007. "Elastic Money, Inflation, And Interest Rate Policy," Working Paper 1152, Economics Department, Queen's University.
    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. Cyril Monnet & Daniel R. Sanches, 2015. "Private Money and Banking Regulation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(6), pages 1031-1062, September.
    6. Patrick K. O'Brien & Nuno Palma, 2023. "Not an ordinary bank but a great engine of state: The Bank of England and the British economy, 1694–1844," Economic History Review, Economic History Society, vol. 76(1), pages 305-329, February.
    7. Kahn, Charles M. & Roberds, William, 2009. "Why pay? An introduction to payments economics," Journal of Financial Intermediation, Elsevier, vol. 18(1), pages 1-23, January.
    8. Yener Gök, Zeynep, 2018. "Yeni Parasalcılık: Bir Yazın Taraması [New Monetarism: A Survey Of The Literature]," MPRA Paper 88349, University Library of Munich, Germany.
    9. Fujiki, Hiroshi, 2003. "A model of the Federal Reserve Act under the international gold standard system," Journal of Monetary Economics, Elsevier, vol. 50(6), pages 1333-1350, September.
    10. Kahn, Charles M. & Roberds, William, 2001. "Real-time gross settlement and the costs of immediacy," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 299-319, April.
    11. Ed Nosal & Guillaume Rocheteau, 2006. "The economics of payments," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Feb.
    12. P.Antipa, 2014. "How Fiscal Policy Affects the Price Level: Britain’s First Experience with Paper Money," Working papers 525, Banque de France.
    13. Williamson, Stephen & Wright, Randall, 2010. "New Monetarist Economics: Models," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 2, pages 25-96, Elsevier.
    14. John Moore & Nobuhiro Kiyotaki, 2008. "Liquidity, Business Cycles, and Monetary Policy," 2008 Meeting Papers 35, Society for Economic Dynamics.
    15. Antipa, P., 2013. "Fiscal Sustainability and the Value of Money: Lessons from the British Paper Pound, 1797-1821," Working papers 466, Banque de France.
    16. Michael D. Bordo & Finn E. Kydland, 1990. "The Gold Standard as a Rule," NBER Working Papers 3367, National Bureau of Economic Research, Inc.
    17. Stephen Broadberry & Bruce M.S. Campbell & Alexander Klein & Mark Overton & Bas van Leeuwen, 2022. "British Business Cycles, 1270-1870," Oxford Economic and Social History Working Papers _198, University of Oxford, Department of Economics.
    18. Temzelides, Ted & Williamson, Stephen D., 2001. "Payments Systems Design in Deterministic and Private Information Environments," Journal of Economic Theory, Elsevier, vol. 99(1-2), pages 297-326, July.
    19. Stephen Williamson, 2000. "The Research Agenda: Payment Systems and Private Money," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 2(1), November.
    20. Pamfili Antipa & Christophe Chamley, 2019. "Regimes of Fiscal and Monetary Policy in England during the French Wars (1793-1821)," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-327, Boston University - Department of Economics.

    More about this item

    Keywords

    Bullionist Controversy; Quantity Theory of Money; Bayesian estimation;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913

    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:pra:mprapa:83741. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.