Studies in the History of Monetary Theory

This book presents an alternative approach to monetary theory that differs from the General Theory of Keynes, the Monetarism of Friedman, and the New Classicism of Lucas. Particular attention is given to the work of Hawtrey and his analysis of financial crises and his explanation of the Great Depression. The unduly neglected monetary theory of Hawtrey is examined in the context of his contemporaries Keynes and Hayek and the subsequent contributions of Friedman and of the Monetary Approach to the Balance of Payments.

Studies in the History of Monetary Theory aims to highlight the misunderstandings of the quantity theory and the price-specie-flow mechanism and to explain their unfortunate consequences for the subsequent development of monetary theory. The book is relevant to researchers, students, and policymakers interested in the history of economic thought, monetary theory, and monetary policy.

“Understanding the uses and limitations of monetary policy requires first understanding how economists think about money, past, present and future.   That the history of monetary theory, like the history of economic thought generally, has fallen out of fashion in academia is all the more reason to value the important work of David Glasner and the insightful essays collected in this book.” (–Barry Eichengreen, University of California, Berkeley, USA.)

“David Glasner has been pursuing fundamental questions in monetary theory in a deep way for over thirty years. This collection represents the distillation of his wisdom, and any economist interested in these issues will learn a great deal by reading these pieces. They are deep in the theoretical sense but practical as well.” (–Tyler Cowen, George Mason University, USA)

“David Glasner challenges much conventional wisdom about monetary history, and his essays are invariably provocative, well researchedand clearly written. They are a pleasure to read. They deserve serious attention from anyone interested in how ideas about the monetary system have, and still do, interact with its evolution and operation.” (–David Laidler, University of Western Ontario, Canada.)

“David Glasner has pulled together a lifetime of erudite work on the history of monetary thought in this collection of papers.  It is divided into two main blocks, the first part revisiting the UK classical monetary debates of the early 19^th century, and the second part primarily on the contribution of Hawtrey and Hayek to interwar monetary issues.  All are well worth reading, but I especially liked the emphasis on Hawtrey’s contribution.” (–Charles Goodhart, London School of Economics, United Kingdom.)

“This collection of essays is both an engaging excursion into the history of monetary thought, and a powerful case for an approach to macroeconomics that allows for heterogeneity in beliefs and adjustments to disappointed expectations. It will be of value to students of modern macroeconomics who would like a clear-headed appraisal of the limitations of textbook models, by someone who thinks with exceptional clarity about these complex and contentious issues.” (–Rajiv Sethi, Barnard College, Columbia University, USA.)

“This book will surely give the history of economic thought a good name. Its lucid and convincing analyses of the celebrated debates relating to monetary theory from Hume through to Cairnes, and to the twentieth-century contributions by Hawtrey, Keynes and Hayek render it ideal for advanced courses. The author’s account of the influences governing his intellectual development provides an interesting case-study of the informal lines of communication at play in the academic context.” (–Samuel Hollander, University of Toronto, Canada.)

“This delightful book reviews, from a modern perspective, some classic debates in monetary economics. Beyond their historical interest, these debates still appear in contemporary discussions, even if dressed in different clothes. Take the Real Bills Doctrine, but rewrite it in terms of shadow banks: if non-conventional financial institutions lend only on the security of real bills, can they create too much money? Anyone interested in macroeconomics will benefit much from reading Glasner’s collection of essays.” (–Jesus Fernandez-Villaverde, University of Pennsylvania, USA)

“David Glasner is a well-known historian of monetary economics and editor of the widely-read Business Cycles and Depressions: An Encyclopedia. In this inspiring collection, he focuses on controversies in classical monetary theory and contributions by Keynes, Hayek and Glasner‘s real hero, Ralph Hawtrey, who significantly advanced the analysis of monetary factors in economic fluctuations. The underlying unity is Glasner‘s development of the implications of the monetaryapproach to the balance of payments and endogenous money.” (–Harald Hagemann, University of Hohenheim, Germany)

“David Glasner's book captures his lifetime exploration into the deeper longstanding questions of monetaryand macroeconomic theory, questions like Say's Law, and the nature of macroeconomic equilibrium. Unlike most theorists, David's approach is to situate these questions in historical context. So this book is much more than a collection of carefully-crafted essays in the history of economic thought, though it is that too. Strongly recommended to all readers interested in monetary theory and macroeconomics.” (–Nicholas Rowe, University of Western Ontario, Canada.)

“David Glasner’s Essays in the History of Monetary Theory: Controversies and Clarifications examines the long sweep of monetary economics from the 18^th to the 21^st century in relation to changing monetary institutions.  Anyone who wishes to better understand how money worked in the past and may work in the future will profit from reading Glasner’s lucid and informative book.” (–Kevin Hoover, Duke University, USA.)

 “David Glasner’s collection of papers, some published previously some new, constitute together an impressive and comprehensive set of original studies covering monetary and macro analysis from the mid-18th century to the 20th. It is an admirable lifework, presenting a refined perspective that will appeal to everyone interested in the history of human thinking dedicated to the study of whole economies. Old and new controversies come to life, elucidating why scholars reach different conclusions. Highly recommended.” (–Arie Arnon, Ben Gurion University, Israel.)

“David Glasner provides a tour de force of the history of monetary thought. Along the way, he reminds us that everything old is new again when it comes to monetary theory. . Scott Sumner, George Mason University, USA”. (–David Beckworth, George Mason University, USA.)

“David Glasner’s studies into the history of monetary theory show how certain classical macroeconomic principles, properly understood, can clarify some of the macroeconomic debates that continue to divide the profession. Glasner is particularly good at explaining how overlooked thinkers such as Gustav Cassel, Ralph Hawtrey and Earl Thompson developed insights into the sources of business cycles that were in many ways superior to the approaches developed by more famous theorists such as Keynes and Friedman.” (–Scott Sumner, George Mason University, USA.)

“David Glasner's Studies in the History of Monetary Theory: Controversies and Clarifications is a tour de force through classical monetary theory and policy from Hume and Smith, an examination of Say's Law, and the implications of these controversies for the critical debates of the 20th century.  Glasner has an astute ability to provide clarity to critical debates on the complicated subject of monetary theory and policy and macroeconomic and economic performance through time. Highly recommended.” (–Peter Boetke, George Mason University, USA.)

“A very much needed and welcome collection of essays on monetary and banking theories. David Glasner reminds us that there is much more to economics that the Chicago School and its strawmen. This is a true work of history of ideas, where explanations of current crises can be found in three centuries of the study of money and banking. This volume is a must read for anyone interested in money and banking.” (–Maria Pia Paganelli, Trinity University, USA.)

“David Glasner’s new book is a sensitive and erudite exposition and exploration of classical monetary theory, from Smith to Hume and their interpretations. It also excavates the work of Ralph Hawtrey, as well as the less appreciated insights of John Maynard Keynes and Friedrich Hayek. In doing so, it suggests a bold  set of alternative startingpoints to study monetary macroeconomics and macroeconomic episodes, and a promising way to reverse the subject’s retrogression.” (–Arjun Jayadev, Azim Premji University, India.)

“This book is the product of decades of work by Glasner, and it shows. It reviews the thinking of major monetary economists, many of whom have been wrongly overlooked, especially Hawtrey and Cassel who presented an monetary interpretation of the Great Depression in contrast to Friedman’s US-centric explanation. Glasner’s book is a welcome addition to the literature, which has something for anyone interested in monetary economics, the history of economic thought, or the Great Depression.” (–Gabriel Mathy, American University, USA.)

"It was watching, during the Great Recession, macroeconomists of note and reputation who knew none of the history of monetary economics repeatedly make mistake after mistake—often at an infantile level—because of their ignorance that made me realize how lucky I am to have been able to read and learn from David Glasner." (–Brad DeLong, University of California, Berkeley, USA.)

“David Glasner’s Essays in the History of Monetary Theory collects and extends his scholarly, fascinating and readable work on classical monetary theory and on monetary interpretations of the Great Depression. Everyone interested in the history of monetary economics and macroeconomics, especially international adjustment under the gold standard and attempts to explain systemic coordination failure, should read this book. Scholars in these fields will long refer to these articles and assign them to their students.” (–Robert Dimand, Brock University, Canada.)

David Glasner received his PhD in economics from UCLA. He is the author of Free Banking and Monetary Reform and editor of Business Cycles and Depressions: An Encyclopedia.