ECON 8610 - Monetary and Banking Theory

- READINGS -

The Required Books are:
Yeager, The Fluttering Veil

"Palgrave" [Eatwell, Milgate, and Newman, eds.], Money
Selgin, Less Than Zero

The Readings in these books are not available online. They are listed by author in the reading list below.
All the other readings are electronically available (simply click the title for access).

These online articles fall into two categories:

1) Those marked GALILEO They are available on Galileo Databases. If you are on a UGA network access is as easy as clicking the link. Most of these readings can also be accessed from home with a password. Info on getting the password is HERE.

2.) Those marked E-RESERVE are on "Electronic Reserve" at the Library. Click on the title below then choose ECON8610 from the "Course" drop-down menu. To open these files you need the password: econ8610me1

Table of Contents

I. Money: A rough Sketch

II. Microfoundations of Monetary Theory

III. The OLG Approach

IV. The Evolution of Money


V. The Demand for Money: Theoretical Studies

VI. The Demand for Money: Empirical Studies

VII. The Theory of Price-Level Adjustment

VIII. Theories of Expectations-Formation


IX. Deficient Money

X. Redundant Money

XI. Optimal Price-Level Behavior

XII. Banking and Central Banking

XIII. The Supply of Bank Money

XIV. Bank Money, Saving and the Rate of Interest

XV. Money and the Business Cycle

XVI. Banking Panics


I. The Challenge of Monetary Economics

Monetary Analysis, the Equilibrium Method, and Keynes's "General Theory"

Kohn, Meir.

Journal of Political Economy, 1986, vol. 94(6)

A Suggestion for Simplifying the Theory of Money

Hicks, Sir John R.

Economica, 1935

Monetary Economics: A Review Essay
Grossman, Herschel
Journal of Monetary Economics, October 1991, v. 28, iss. 2, pp. 323-45
GALILEO

Taking Money Seriously
Laidler
The Canadian Journal of Economics, Vol. 21, No. 4. (Nov., 1988), pp. 687-713.
GALILEO

II. Microfoundations of Monetary Theory

Money and the Mechanism of Exchange
William Stanley Jevons

Foundations of Monetary Theory
Hahn
in Monetary Theory and Economic Institutions
by De Cecco, Marcello. Fitoussi, Jean-Paul
E-RESERVE

"Introduction" to the 2nd Edition Abridged
Patinkin
Money Interest and Prices
E-RESERVE

A Reconsideration of the Microfoundations of Monetary Theory
Clower
in Money and Markets
E-RESERVE

In Defense of the Finance Constraint
Kohn
Economic Inquiry 19 1981
E-RESERVE

Money and Barter in General Equilibrium with Transaction Costs
Niehans, Jurg;
American Economic Review, Dec. 1971, v. 61, iss. 5, pp. 773-83
GALILEO

Why Money?
Armen A. Alchian
Journal of Money, Credit and Banking, Vol. 9, No. 1, Part 2. (Feb., 1977), pp. 133-140.
GALILEO

The Uses of Money: Money in the Theory of an Exchange Economy
Karl Brunner; Allan H. Meltzer
American Economic Review, Vol. 61, No. 5 (Dec., 1971) , pp. 784-805
GALILEO

Cash in Advance, Microfoundations in Retreat
Howitt
in Inflation, Institutions, and Information
by Vaz and Velupillai
E-RESERVE

A Search-Theoretic Approach to Monetary Economics
Nobuhiro Kiyotaki; Randall Wright
American Economic Review, Vol. 83, No. 1 (Mar., 1993), pp. 63-77
GALILEO

Viewpoint: A Microfoundation of Monetary Economics
Shouyong Shi
Canadian Journal of Economics, Vol. 39, No. 3 (August 2006), pp. 643-88.

Controversy: Microfoundations and the Demand for Money
An Introduction by Huw Dixon
and
Notes on the Microfoundations of Monetary Economics by David Laidler
The Economic Journal, Vol. 107, No. 443. (Jul., 1997), pp. 1169-1170.
GALILEO

The Structure of Exchange in Barter and Monetary Economies
Ross M. Starr
The Quarterly Journal of Economics, Vol. 86, No. 2. (May, 1972), pp. 290-302.
GALILEO

III. The OLG Approach

Introduction
Kareken and Wallace
in Models of Monetary Economics
E-RESERVE

Discussion
Tobin
in Models of Monetary Economics
by Kareken and Wallace
E-RESERVE

Formal Models of Monetary Economics
Hoover
in The New Classical Microeconomics
E-RESERVE

A Legal Restrictions Theory of the Demand for "Money" and the Role of Monetary Policy
Neil Wallace
Federal Reserve Bank of Minneapolis Quarterly Review, Winter 1983, Vol. 7 No. 1
GALILEO

Some Anecdotal Evidence Relating to the Legal Restrictions Theory of the Demand for Money
Gail E. Makinen; G. Thomas Woodward
The Journal of Political Economy, Vol. 94, No. 2. (Apr., 1986), pp. 260-265.
GALILEO

Accounting for Non-interest-Bearing Currency: A Critique of the Legal Restrictions Theory of Money
By White, Lawrence H
Journal of Money, Credit, and Banking, November 1987, v. 19, iss. 4, pp. 448-56
GALILEO

IV. The Evolution of Money

The Theory of Money
Menger
in Principles of Economics
E-RESERVE

The Origin and Development of Media of Exchange

Robert A. Jones
The Journal of Political Economy, Vol. 84, No. 4, Part 1. (Aug., 1976), pp. 757-776.
GALILEO

On Money as a Medium of Exchange
Nobuhiro Kiyotaki; Randall Wright
The Journal of Political Economy, Vol. 97, No. 4. (Aug., 1989), pp. 927-954
GALILEO

The Transition from Barter to Fiat Money
Joseph A. Ritter
The American Economic Review, Vol. 85, No. 1. (Mar., 1995), pp. 134-149.
GALILEO

Adaptive Learning and the Transition to Fiat Money
George Selgin
The Economic Journal, Vol. 113 Issue 484 Page 147 January 2003
GALILEO

"Introduction" to Money and Markets: Selected Readings
Clower
in Money and Markets
E-RESERVE

On the Evolution of Money and Its Implications for Price Stability
Dalziel, Paul
Journal of Economic Surveys, Vol. 14, No. 4 (September 2000), pp. 373-93


V. The Demand for Money: Theoretical Studies

Application and Apparatus of Supply and Demand to Units of Currency
Cannan
AEA Readings in Monetary Economics
E-RESERVE

A Suggestion for Simplifying the Theory of Money
J. R. Hicks
Economica, New Series, Vol. 2, No. 5. (Feb., 1935), pp. 1-19.
GALILEO

The Yield from Money Held
Hutt
in On Freedom and Free Enterprise by Von Mises, 1881-1973.

On Ensuring the Acceptability of a New Fiat Money
George Selgin
Journal of Money, Credit and Banking, Vol. 26, No. 4. (Nov., 1994), pp. 808-826.
GALILEO

Demand for Money: Theoretical Studies
McCallum and Goodfriend
PALGRAVE*

The Transactions Demand for Cash: An Inventory Theoretic Approach
William J. Baumol
The Quarterly Journal of Economics, Vol. 66, No. 4. (Nov., 1952), pp. 545-556.
GALILEO

A Simple Model of the Precautionary Demand for Money.
By: Weinrobe, Maurice D.
Southern Economic Journal, Jul72, Vol. 39 Issue 1, p11, 8p.
GALILEO

Money in a Theory of Exchange
Thornton, Daniel L. Author
Federal Reserve Bank of St. Louis Review, Jan.-Feb. 2000, v. 82, iss. 1, pp. 35-60
GALILEO

Theory of Demand for Money: A Survey of Literature
Subramanian S.Sriram
Indian Journal of Economics VOL.48 No.4
GALILEO

VI. The Demand for Money: Empirical Studies

Quantity Theory of Money
Friedman
PALGRAVE*

The Quantity Theory of Money: A Restatement
Friedman
Studies in the Quantity Theory of Money
E-RESERVE

Demand for Money: Empirical Studies
Goldfield
PALGRAVE*

The Search for a Stable Money Demand Function: A Survey of the Post-1973 Literature
John P. Judd; John L. Scadding
Journal of Economic Literature, Vol. 20, No. 3. (Sep., 1982), pp. 993-1023.
GALILEO

The "Buffer Stock" Notion in Monetary Economics
David Laidler
The Economic Journal, Vol. 94, Supplement: Conference Papers. (1984), pp. 17-34.
GALILEO

Buffer-Stock Money: Interpreting Short-Run Dynamics Using Long-Run Restrictions
William D. Lastrapes; George Selgin
Journal of Money, Credit and Banking, Vol. 26, No. 1. (Feb., 1994), pp. 34-54.
GALILEO

VII. The Theory of Price-Level Adjustment

A Critique of Neoclassical Monetary Theory
Patinkin
Money Interest and Prices
E-RESERVE

Walras' Theory of Tatonnement
By Patinkin
Money Interest and Prices
E-RESERVE

Toward a Theory of Price Adjustment
Arrow
Market Process Theories edited by Peter J. Boettke and David L. Prychitko
E-RESERVE

Product Markets
Arthur M. Okun
Prices and Quantities: A Macroeconomic Analysis
E-RESERVE

Rational Expectations and Price Flexibility
Shaw
Rational Exceptions
E-RESERVE

A Sticky-Price Manifesto
Laurence Ball and N. Gregory Mankiw
NBER Working Paper No. w4677, Issued in July 1995
GALILEO

Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly
N. Gregory Mankiw
The Quarterly Journal of Economics, Vol. 100, No. 2. (May, 1985), pp. 529-537.
GALILEO

Microeconomic Efficiency and Nominal Wage Stickiness
Charles L. Schultze
The American Economic Review, Vol. 75, No. 1. (Mar., 1985), pp. 1-15.
GALILEO

VIII. Theories of Expectations-Formation

Non-Rational Expectations
Shaw
Rational Expectations
E-RESERVE

The Meaning of Rational Expectations
Shaw
Rational Expectations
E-RESERVE

Rational Expectations: Assessment and Critique
Shaw
Rational Expectations
E-RESERVE

Rational Expectations and Economic Thought
Brian Kantor
Journal of Economic Literature, Vol. 17, No. 4. (Dec., 1979), pp. 1422-1441.
GALILEO

Rational Expectations, Risk, Uncertainty and Market Response
Meltzer
Crises in the Economic and Financial Structure edited by Paul Wachtel.
E-RESERVE

Optimal Expectations and the Extreme Information Assumptions of `Rational Expectations' Macromodels
Benjamin M. Friedman
Journal of Monetary Economics, Volume 5, Issue 1, January 1979, Pages 23-41
GALILEO

IX. Deficient Money

Effective Demand Failures

Axel Leijonhufvud

from idem., Information and Coordination: Essays in Macroeconomic Theory (New York: Oxford University Press, 1981).

The Significance of Monetary Disequilibrium
Yeager
YEAGER*

A General Disequilibrium Model of Income and Employment
Robert J. Barro; Herschel I. Grossman
The American Economic Review, Vol. 61, No. 1. (Mar., 1971), pp. 82-93.
GALILEO

Evaluating the Non-Market-Clearing Approach
Peter Howitt
The American Economic Review, Vol. 69, No. 2,
Papers and Proceedings of the Ninety-First Annual Meeting of the American Economic Association. (May, 1979).
GALILEO

Some Macroeconomic Implications of Price Stickiness
Laidler
LAIDLER*

Monetary Disequilibrium and Market Clearing
Grossman
PALGRAVE*

Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression
Ben S. Bernanke
The American Economic Review, Vol. 73, No. 3. (Jun., 1983), pp. 257-276.
GALILEO

X. Redundant Money

The Welfare Cost of Inflationary Finance
Martin J. Bailey
The Journal of Political Economy, Vol. 64, No. 2. (Apr., 1956), pp. 93-110.
GALILEO

The Cost, Sources, and Control of Inflation
Yeager
YEAGER*

Cost and Consequences of Inflation
Axel Leijonhufvud
Information and Coordination : Essays in Macroeconomic Theory
E-RESERVE

Inflation and the Economists: Critique
Axel Leijonhufvud
Information and Coordination : Essays in Macroeconomic Theory
E-RESERVE

On the Cost of Anticipated Inflation
Laidler
LAIDLER*

The Disruptive Effect of Inflation on the Organization of Markets
Carlton
Inflation, Causes and Effects edited by Hall
E-RESERVE

XI. Optimal Price-Level Behavior

The Optimum Quantity of Money
Friedman
The Optimum Quantity of Money, and Other Essays

Optimum Quantity of Money
Howitt
PALGRAVE*

Less Than Zero: The Case for a Falling Price Level in a Growing Economy
George Selgin
SELGIN*

The Macroeconomics of Low Inflation
George A. Akerlof; William T. Dickens; George L. Perry; Robert J. Gordon; N. Gregory Mankiw
Brookings Papers on Economic Activity, Vol. 1996, No. 1. (1996), pp. 1-76.
GALILEO

The Optimum Quantity of Money: Theory and Evidence
Casey B. Mulligan; Xavier X. Sala-I-Martin
Journal of Money, Credit and Banking, Vol. 29, No. 4
GALILEO

The Cost of Inflation and Disinflation
Kevin Dowd
CATO Journal, Fall94, Vol. 14, Issue 2
GALILEO

XII. Banking and Central Banking

What are Banks
Yeager
YEAGER*

Financial Intermediaries
Tobin
PALGRAVE*

The Evolution of a Free Banking System
Selgin and White
Economic Inquiry Volume 25, issue 3.
E-RESERVE

The New Theory of Financial Intermediation
Chant
Current Issues in Financial and Monetary Economics
E-RESERVE

Central Banking
Goodhart
PALGRAVE*

Why Do Banks Need a Central Bank?
Goodhart
Money, Information and Uncertainty
E-RESERVE

The Rationalization of Central Banks
Selgin
Critical Review Volume 7
E-RESERVE

XIII. The Supply of Bank Money

High-Powered Money and the Monetary Base
Brunner
PALGRAVE*

Money Supply
Brunner
PALGRAVE*

Mathematical Theory of Banking
Edgeworth
The Foundations of Monetary Economics edited by David Laidler.
E-RESERVE

The Supply of Bank Money
Jürg Niehans
The Theory of Money
E-RESERVE

Free Banking and Monetary Control
George Selgin
The Economic Journal, Vol. 104, No. 427. (Nov., 1994), pp. 1449-1459.
GALILEO

Banking School, Currency School, Free Banking School
Schwartz
PALGRAVE*

XIV. Bank Money, Saving and the Rate of Interest

Interest Theories: Old and New
Fetter
Capital, Interest, and Rent : Essays in the Theory of Distribution
E-RESERVE

Commercial Banking and the Rate of Interest (in Notes and Memoranda)
Harry G. Brown
The Quarterly Journal of Economics, Vol. 24, No. 4. (Aug., 1910), pp. 743-749.
GALILEO

A Loanable Funds Theory of Unemployment and Monetary Disequilibrium
Meir Kohn
The American Economic Review, Vol. 71, No. 5. (Dec., 1981), pp. 859-879.
GALILEO

Natural Rate and Market Rate
Axel Leijonhufvud
PALGRAVE*

Chapter 10
Patinkin
Money Interest and Prices
E-RESERVE

On Wicksell's Theory of Price-Level Dynamics
David Laidler
Essays on Money and Inflation
E-RESERVE

The Liquidity Effect
Selgin and Lastrapes
Journal of Macroeconomics Volume 17 issue 3
E-RESERVE

XV. Money and the Business Cycle

Some Skeptical Observations on Real Business Cycle Theory
Lawrence H. Summers
Federal Reserve Bank of Minneapolis Quarterly Review Vol. 10 No. 4 Fall 1986
GALILEO

Understanding Business Cycles
Lucas
Journal of Monetary Economics. Volume 5, issue 0
E-RESERVE

Money and the Business Cycle Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data
John F. Boschen and Herschel I. Grossman
Journal of Monetary Economics, Volume 10, Issue 3, 1982
GALILEO

A Cash-Balance Interpretation of Depression
Yeager
YEAGER*

On "Real" and "Sticky-Price" Theories of the Business Cycle
Bennett T. McCallum
Journal of Money, Credit and Banking, Vol. 18, No. 4. (Nov., 1986), pp. 397-414.
GALILEO

Phillips Curves and Hayekian Triangles
Bellante and Garrison
History of Political Economy Volume 20 Issue2
E-RESERVE

XVI. Banking Panics

Real and Pseudo-Fianancial Crises
Schwartz
Money in Historical Perspective
E-RESERVE

Bank Runs, Deposit Insurance, and Liquidity

Diamond, Douglas W. and Dybvig, Philip H.
Federal Reserve Bank of Minneapolis Quarterly Review, Winter 2000, Vol. 24 Issue 1, p14, 10p
GALILEO

The Origins of Banking Panics: Models, Facts, and Bank Regulation
Calomiris and Gorton
Financial Markets and Financial Crises
E-RESERVE

The Truth About Bank Runs
Kaufman
The Financial Services Revolution edited by Catherine England and Thomas Huertas.
E-RESERVE

Bank Suspension of Convertibility
Gorton
Journal of Monetary Economics. Volume 15
E-RESERVE

In Defense of Bank Suspension
George Selgin
Journal of Financial Services Research Volume 7 Issue 4
E-RESERVE

Are Banking Crises a Free Market Phenomena
George Selgin
Critical Review Volume 8
E-RESERVE

Legal Restrictions, Financial Weakening, and the Lender of Last Resort
George A. Selgin
Cato Journal, Volume 9 Number 2, Fall 1989
GALILEO