Money Demand and Supply

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Books and Essays on this site

Mises, Ludwig von, The Theory of Money and Credit

Bagehot, Walter, Lombard Street

    Classic book describing the workings of the banking industry in London, with particular emphasis on the emerging concept of a Central Bank. This book influenced the subsequent structure and behavior of the Federal Reserve System and other national Central Banks. Difficulty Level 1: College

Buchanan, James M. and Richard E. Wagner, Democracy in Deficit: The Political Legacy of Lord Keynes, specifically Chapter 8, Money-Financed Deficits and Political Democracy. Difficulty Level 2: Graduate School

Hume, David, Essays, Moral Political and Literary, specifically, Of Money.

Laughlin, J. Laurence, The History of Bimetallism in the United States.

Leggett, William, Democratick Editorials: Essays in Jacksonian Political Economy, Compiled and edited by Lawrence H. White.

    Between 1834 and 1837, a youthful William Leggett switched from writing mediocre poetry to writing impassioned editorials in support of individual liberties and private property rights. Beginning at the Evening Post, and continuing on by founding the Plaindealer, Leggett found a ready audience for his frank essays. He wrote extensively against monopolies, against government control, against slavery, and in favor of free trade. His keen journalism influenced the exciting economic developments of the second Jackson administration, developments that shape U.S. policies to this day.

    Leggett's writings on the banking industry and its relationship with the government constituted a major theme. Lawrence H. White has collected together Leggett's best pieces on the topic (see Part II), from the pros and cons of chartering of the Bank of the United States, to the gold standard versus paper money. White's helpful Foreword and many editorial footnotes place Leggett's writings and references in historical context. Difficulty Level 1: College

    On Leggett's untimely death from ongoing illness, his good friend and co-editor William Cullen Bryant penned this resounding verse:

      IN MEMORY OF WILLIAM LEGGETT

      The earth may ring, from shore to shore,
      With echoes of a glorious name,
      But he, whose loss our tears deplore,
      Has left behind him more than fame.

      For when the death-frost came to lie
      On Leggett's warm and mighty heart,
      And quench his bold and friendly eye,
      His spirit did not all depart.

      The words of fire that from his pen
      Were flung upon the fervid page,
      Still move, still shake the hearts of men,
      Amid a cold and coward age.

      His love of truth, too warm, too strong
      For Hope or Fear to chain or chill,
      His hate of tyranny and wrong,
      Burn in the breasts he kindled still.

      —William Cullen Bryant, 1839

Mill, John Stuart, Principles of Political Economy, specifically Book III, Chapters VII-XXIV: Of Money, etc. For additional chapter titles, see the Table of Contents.

Say, John Baptiste, A Treatise on Political Economy, specifically Book I, Chapter XXI: Of the Nature and Uses of Money.

Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, specifically Book I, Chapters 4-5: Of the Nature and Uses of Money, and Of the Real and Nominal Price of Commodities.

Wicksteed, Philip H., The Common Sense of Political Economy, specifically Book I, Chapter 4: Money and Exchange, and Book II, Chapter 7: Banking. Bills. Currency.

White, Lawrence H. and George Selgin, Why Private Banks and Not Central Banks Should Issue Currency, Especially in Less Developed Countries.

Other Recommended Readings

Cowen, Tyler, Randall Kroszner, Explorations in the New Monetary Economics

Friedman, Milton & Anna Schwartz, A Monetary History of the United States

Frydman, Roman and Edmund Phelps, Individual Forecasting and Economic Outcomes

Gordon, Robert J., (ed.), Milton Friedman's Monetary Framework: A Debate with His Critics

Hansen, Alvin, A Guide to Keynes

Hayek, Friedrich, Monetary Theory and the Trade Cycle

Lachmann, Ludwig, Capital and Its Structure

Leihonhufvud, Axel, On Keynesian Economics and the Economics of Keynes

Lucas, Robert, Studies in Business Cycle Theory

Lucas, Robert, Models of Business Cycles

Myrdal, Gunnar, Monetary Disequilibrium

Robertson, D. H., Banking Policy and the Price Level

Robertson, D. H., Money

Stein, Herbert, Presidential Economics

Taylor, John, (ed.), Monetary Policy Rules

White, Lawrence, Competition and Currency: Essays on Free Banking and Money

White, Lawrence, Free Banking in Britain: Theory, Experience and Debate, 1800-1845

White, Lawrence, The Theory of Monetary Institutions

Yeager, Leland, The Fluttering Veil: Essays on Monetary Disequilibrium

See also: Inflation.