Money, Banks and Finance in Economic Thought

Simon Newcomb’s Monetary Theory

Valeonti Sofia, Université Paris 1 Panthéon-Sorbonne

In recent literature a distinction has been introduced between the classical monetary theory and the quantity monetary theory. The aim of this distinction has been to show that the classical monetary theory was not based exclusively on the quantity theory of money. The classical monetary theory applies a different mechanism of adjustment for each type of issue (metallic currency, convertible bank issues and inconvertible paper money), while the quantity theory applies the causality and proportionality postulates for all type of issues. This paper focuses in Simon Newcomb’s monetary theory and aims to show that his theory is in line with the classical economic theory. This is interesting because it spots light in Newcomb’s approach in the US monetary debates of the Reconstruction period.

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Keywords: Simon Newcomb; classical monetary theory

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