EC311 History of Economics
2021-22, Dr Guillaume Yon
Class 4 week 7. Worksheet: Money
Learning objectives: Enumerate Classical views of money and evaluate how they evolved during the Restriction
Adam Smith
William Huskisson
Charles Bosanquet
Oversupply of money
caused devaluation.
Bos argues that
money supply
growth is
endogenous and so
wasn’t the reason
for the
devaluation. The
real reason was
war payments etc
The problem (the high price of bullion):
How do Bosanquet and Huskisson/Ricardo/Bullion
Committee differ in their analysis of what had
caused the depreciation of the pound after the
Restriction Act?
Money and monetary theory:
Which of the tenets of Classical theory (Real Bills
Doctrine, Price- Specie-Flow Mechanism, Law of
Reflux, Stable Velocity) did the writer assume to
be valid or base his arguments on? What do you
believe is money for each writer? What is money's
primary function in the (real) economy - means of
exchange, standard of value, or something else?
Monetary Policy:
Can you identify each writer's views on how
incentives act upon the behaviour of economic
agents within the banking system? Did the author
differentiate between different instruments
acting as money? Is he alive to recent
innovations? What is the role of credit and the
wider banking system? What is the role of the
Bank of England? what should be the outcome
targeted by normative monetary policy?