Uneasy Money is a blog about monetary policy, which means it is also about monetary theory and macroeconomics. I began blogging in 2011 when a weak recovery from the 2008 financial crisis and ensuing Little Depression (aka Great Recession) had only just started. Here is what I wrote then about the blog which I dedicated to the memory of the English monetary economist, R. G. Hawtrey:

The past three years have shown that we don’t know as much as we thought about any of those fields, and so I hope that this blog will contribute something to our cooperative effort to learn about the interaction between money and economic activity and about how monetary policy can help us achieve a more stable economic environment with less unemployment than we have had these past three years. My own view is that monetary policy has been too tight for the past three years, thereby creating the conditions for the September 2008 financial crisis after Lehman Brothers failed and then preventing the economy from staging a rapid recovery as it has often done previously after sharp downturns. It is more than coincidence that the last time that the US economy failed to recover strongly after a sharp downturn was during the Great Depression. Then, too, the underlying cause of the downturn was monetary, and then, too, the economy failed to recover because monetary policy remained too tight (owing to the perverse dynamics of a dysfunctional gold standard) to allow a recovery to gain any traction. 

As the recovery continued, my focus on this blog has shifted from immediate concerns about monetary policy to other interests in the history of economics and monetary theory and to my concerns about how macroeconomics has developed over the past forty years under the influence of Robert Lucas, Thomas Sargent and Edward Prescott. Many of the ideas contained in my blogposts over the years have found their way into my published and unpublished essays which have just been published by Palgrave Macmillan in a volume Studies in the History of Monetary Theory: Controversies and Clarifications.


55 Responses to “About”

  1. 1 JP Koning July 10, 2011 at 6:19 pm

    To help get readers up and running, what books written by Hawtrey do you recommend we read? What papers written on Hawtrey should we try and locate?


  2. 2 David Glasner July 11, 2011 at 12:53 pm

    JP, Thanks for this request. I am actually not that much of an expert on Hawtrey’s writings. His first important work was Good and Bad Trade published in 1913. It was his first exposition of his basic model of business cycles. In 1919 he published another work of monetary theory, Currency and Credit which elaborated on the theory offered in Good and Bad Trade providing a lot of interesting historical material and more explicit policy analysis. In 1927 he published The Gold Standard in Theory and Practice whose subject was self-explanatory. It went through several editions. In later editions (1931, I think) he provided a very nice summary of his basic understanding of how the botched attempt to restore the international gold standard led to the Great Depression. Hawtrey covers a lot of the same ground, but in much more depth in The Art of Central Banking, a collection of essays including a very long essay by that title focusing on the Great Depression, as does an essay on French monetary policy. For my money, the discussions in these two books are still the best theoretical accounts of the causes of the Great Depression ever written, though Scott Sumner’s work (still unpublished, alas) on the Great Depression is right up there with them. In 1938, Hawtrey wrote another remarkable combination of history and theory, A Century of Bank Rate, reviewing the way in which the Bank of England had administered monetary policy from the 1830s to the 1930s, and providing a theoretical framework for understanding the effects of those policies. He also published another collection of essays Capital and Employment in 1937, which I have not read. It does contain, I believe, Hawtrey’s commentary on Keynes’s General Theory as well as on Hayek’s business cycle theory. Despite his advancing age, Hawtrey remained active in the post-war period. He was notable for remaining wedded to the basic business cycle model developed in Good and Bad Trade, which I think was held against him by the younger generation of Keynesians that disdained anybody who did not fall into step with the Keynesian program. He also argued forcefully, but without much effect, that the post-war devaluation of the pound had been a mistake and that the pound had been consistently undervalued despite chronic balance of payments difficulties that Hawtrey attributed to excessive aggregate demand caused by a chronically low Bank Rate. His last book, Incomes and Money, published in 1967, when he was 88, shows the signs of his advancing age. The argument was not always as clear and well-formulated as in his earlier writings and he was not as much in command of the facts as he had once been. Still, it offers a lot of worthwhile commentary on monetary policy as well as to me the very convincing explanation for poor US economic performance in the 1950s, which was that all the major US trading partners had pegged their currencies to the dollar at undervalued parities, making it difficult for US exports to compete without deflation. His work is the clearest anticipation of what would later be developed by Harry Johnson into the monetary approach to the balance of payments.


  3. 3 David Blake July 20, 2011 at 1:26 am

    How do I ask for a password to read your password protected post on money?


  4. 4 mcmikep July 20, 2011 at 5:56 am

    I would really like to read your latest post about the flaws of EMH. How exactly can I do that? ( I tried my WordPress pw and that didn’t do it.)


  5. 5 Patrick Deutscher August 5, 2011 at 6:11 pm

    Hello David, I’m very happy to see your posts and that you are also drawing attention to Hawtrey’s work. Your account of his ideas and suggestions on reading are very good. It has been quite a while since I turned to this material, but I think it’s safe to say the Currency and Credit was the work in which the core of his analysis was developed. Another book that might be fruitful given the current situation is Trade Depression and the Way Out published in 1933. Pat Deuscher


  6. 6 Anthony Migchels January 2, 2012 at 12:47 am

    Interesting. I hadn’t heard of Hawtrey.
    It is useful to see how non-gold people address inflation.

    But all monetary debate should address cost for capital just as much as volume of the money supply.

    One of the key issues is that interest is an important cause of inflation. Higher interest rates lead to more inflation in the long term, after the higher rates have subsided. Higher Interest rates temporarily slow the velocity of circulation, making the real money supply smaller. But cost for credit is higher and this raises prices.

    But interest is a wealth transfer to the Plutocracy in even more important and direct ways.

    Here’s some more about the basic problems of interest:

    Here’s how these discussions work out with some leading Austrian Economists.
    Gary North: http://realcurrencies.wordpress.com/2011/12/23/gary-north-on-interest/
    the Daily Bell: http://realcurrencies.wordpress.com/2012/01/01/daily-bell-wrapping-up/


  7. 7 David Glasner January 3, 2012 at 10:01 am

    Anthony, I’m glad that you are interested in Hawtrey and I hope that you will get a chance to read some of his work. Increasing interest rates increases, not, as you assert, reduces, the velocity of circulation. That implication of basic monetary theory is well supported empirically, so you might want to rethink you position. I wouldn’t call Gary North a leading Austrian economist. From what little I know about him, he seems to be a nut, and rather scary.


  8. 8 Anthony Migchels January 3, 2012 at 11:30 am

    Thanks David.
    I’d be interested in some backing up about that statement (re velocity)!

    Well, North is close to Rockwell, who is one of Paul’s advisers.


  9. 9 David Glasner January 4, 2012 at 9:18 am

    Anthony, Is closeness to Rockwell, who is one of Paul’s adviser’s, evidence for or against being a nut?


  10. 10 daniel January 30, 2012 at 9:32 pm

    Man, I love your blog. Its short and soft spoken but it’s one of the best out there. But I have a question: do you have any explanation for the widespread commentary claiming monetary policy is too loose? Like, look at Ed Harrison’s Credit Writedowns rants about cheated savers, et al. There is so much of that stuff; even pundits who used to worship at the knee of Friedman now rail against “re-blowing the bubble” and for “allowing deleveraging”. Then you have guys like Plosser wondering on TV today whether how more inflation could boost employment. Wouldn’t you say maybe they could try it and find out, considering the costs of not doing so?


  11. 11 David Glasner February 1, 2012 at 1:51 pm

    Daniel, Thanks. I think there is a reflexive inflation-phobia, which I actually sympathize with and which I suspect Monetarists are especially susceptible to, Monetarism having its origins as an anti-inflation policy program. Thanks also for the reference to the Plosser interview, I will have to take a look at it.


  12. 12 I Miss Nixon February 8, 2012 at 3:00 am

    what Hawtrey called “the inherent instability of credit”

    you do not discuss the role of the level of private debt in either the Great Depression or the Lesser Depression, yet these words of Hawtrey are right to the point.


  13. 13 Jim Caton February 25, 2012 at 8:12 pm

    Hi David,

    I am an Economics MA student at San Jose State University. I am taken by your argument that much of the monetary that occurred instability shortly before and during the Great Depression was due to gold demand shocks. It is a powerful alternative to the oversimplified Eichengreen/Temin “gold-fetters” argument.

    Do you know of any research that uses regressions to elaborate on this point?

    Any help is greatly appreciated.



  14. 14 David Glasner February 25, 2012 at 8:42 pm

    Jim, Thanks. Scott Sumner has a lengthy unpublished manuscript in which he provides a historical narrative of the Great Depression as well as various regressions testing the gold demand hypothesis. He has discussed his results on his blog themoneyillusion.com on a number of occasions, so you could check the blog. You could also email him directly at Bentley University and ask him about his work and his econometric results.


  15. 15 Jim Caton February 25, 2012 at 9:05 pm

    Thanks for the timely response David. I will do exactly that.


  16. 16 Blue Aurora March 17, 2012 at 6:30 am

    Out of curiosity David Glasner, would you post reviews of Ralph Hawtrey’s book on Amazon.com? I think it would be a good way of informing the general public more about Ralph Hawtrey. In fact, I recently acquired a copy of Ralph Hawtrey’s The Art of Central Banking in part thanks to your influence!


  17. 17 Jim Caton March 29, 2012 at 7:30 pm


    Thanks for the earlier suggestion. Scott let me see some of his current work and it has been of great help.

    I am currently looking for data sets that show quarterly gold stocks/supplies and GDP of the U.S., Britain, France, and Germany during the depression of 1920-21 and also during the Great Depression. Again, any assistance is greatly appreciated. (I’ve already checked FRED, FRASER, NBER, and am still not finding the all of the data I need for my study.)

    Thanks again,

    Jim Caton


  18. 18 David Glasner April 1, 2012 at 2:18 pm

    Blue Aurora, Good suggestion. I’ve never posted any book reviews on Amazon. I’m a little too busy to start writing reviews of Hawtrey just now, but I will keep it in mind. Thanks.

    Jim, I am not sure that quarterly GDP measurements are even available that far back. Other than that I am afraid that I can’t give you any help on fining the data you need. Good luck and please let me know if you come up with any interesting results.


  19. 19 andrew August 29, 2012 at 9:39 pm

    Hello I have a question about deflation. There was a study that I just read it concluded that during the Great depression period in the united states out of all countries examined only half had a depression and most of the episodes with deflation and no depression occurred under a gold standard
    in the end they found that there were many more periods with deflation and growth than with depression and found virtually no link between depression and deflation I would like to know your opinion on this thank you

    Click to access sr331.pdf


  20. 20 David Glasner August 30, 2012 at 8:50 am

    Andrew, From a quick look at the study, I see that it is concerned with the effects of deflation over a long period of time, not just during the Great Depression. A fast growing economy, such as we and most of Europe had in the nineteenth century can perform well with deflation because the growth is reflected in falling prices. If deflation is generated by economic growth, there is no problem. There is a problem when deflation is produced not by a growing economy but by a monetary disorder such as a rising value of gold under a gold standard regime. That is what happened in the Great Depression. So I don’t see any inconsistency between my position and the results of the study that you are referring to.


  21. 21 andrew September 9, 2012 at 3:02 pm

    “The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.”

    Was Milton Friedman saying that if there was no central bank during the Great Depression than the money supply would not have contracted as much as it did?


  22. 22 Cassandra September 24, 2012 at 1:28 pm

    I want to express my gratitude to you for your considerable efforts in producing (and mediating) this blog, making it one of the most measured and edifying reads anywhere, and also extend my thanks to many of your thoughtful readers – making “Uneasy Money”an inspiring place to visit. I am truly grateful.


  23. 23 Scott Supak December 4, 2012 at 2:32 pm

    While much of what I read here is a bit over my head, I have learned much. For example, I would love to hear more about the subject of this old post:


    Is the Fed still paying 0.25% interest on reserves? Many other people to whom I’ve mentioned this tell me it’s a shame that more people don’t understand it, especially considering that the 3 month treasury is currently 0.10. You don’t have to be an economist to see something wrong with that.


  24. 24 jcesguerraJCE January 8, 2013 at 3:29 pm

    Hello Mr Glasner
    I’m writing regarding the debate about whether the medium of account or medium of exchange is the defining characteristic of money that Scott Sumner started a few weeks ago. You weighed in in that the debate in this post (https://uneasymoney.com/2012/11/25/its-the-endogeneity-redacted/)

    I wanted to ask you which authors have developed a monetary theory along those lines (studying each of those characteristics). In other words, who are the intellectual parents of that debate? Who do you base your mental framework on?



  25. 25 Tom Brown September 6, 2013 at 3:16 pm

    David, I wish you had an “Ask David” tab! Sometimes I have questions for you that don’t fit neatly into your post subjects. I have one on HPE for example.


  26. 26 David Glasner September 7, 2013 at 9:29 pm

    Well you can always ask here, I guess. What’s HPE?


  27. 27 Tom Brown September 7, 2013 at 9:38 pm

    Hi David!

    What’s HPE?! … I thought all you MMists and MM sympathizers knew that one: hot potato effect, of course. ;^)

    I’ve been pestering other people w/ this question, and perhaps you’ll think it’s silly, but here goes: I posted to Scott Sumner, but too late I think… he’d already moved on to other topics. It’s related to this post from Scott (Scott presents seven cases, 1 – 7):


    OK, say we consider two cases here, A & B:

    A. MOA NOT gold (like Scott’s cases 5 & 6): Fed finds $1T of coins (MOE) in the basement they didn’t know they had.

    B. MOA = gold (like Scott’s case 4): Fed finds $1T of *GOLD* coins (MOE) in the basement they didn’t know they had.

    In both cases the Fed announce the discovery to the world, put all the coins (which are face value assets of the Fed, as all coins held by the Fed are) up for sale, and decide not to remit anything to Tsy (say they had that power: … perhaps they’re keeping it for an anticipated expense in the year 5723 AD). You can assume it was a magic basement if you want that just “made” the coins this one time. Again, they don’t remit anything to Tsy, and they don’t destroy the coins.

    Is there a difference in the two cases? Will either result in inflation? Why or why not?

    Much Thanks!

    (Also, I’m just starting to uncover the old Law of Reflux and MOE vs MOA debates involving you, Rowe, Sumner, Woolsey, JP Koning, Mike Sproul, etc… very interesting!… the MOA vs MOE thing was almost renewed between Sumner and Rowe recently… but Rowe never got back to it. He went away to think about it and never returned… oh well.)


  28. 28 Tom Brown September 8, 2013 at 2:29 pm

    re: Yeager’s review: Ouch! I can see why he never made your holiday card list.


  29. 29 Tom Brown September 8, 2013 at 7:11 pm

    Sorry David… I’ll try not to make a habit of posting questions here, but have you ever read Godley-Lavoie? That old Tobin Yeager (and related posts) and comments were very interesting. Seems that might be good for further reading on the subject. Thoughts?


  30. 30 David Glasner September 11, 2013 at 8:49 am

    Tom, Here’s my quick (though tardy) response to your two cases. I’m not sure what you mean by coins. I am not sure what I am supposed to assume about the value of the coins in case A. But it seems reasonable to assume that they are worth more than their metallic content. If so, there is no real difference between the coins and paper. So I don’t see why finding a stack of unused paper dollars in the basement of the Treasury of the Fed would make a bit of difference. So it seems to me to be a non-event. As for case B, I am assuming that you are assuming the existence of a gold standard in which all US currency was convertible into gold at a predetermined conversion rate. If so, whether finding gold in the basement was inflationary would depend on whether the gold that was discovered was more than a negligible amount in comparison to the total amount of gold in the world and whether there was an expectation that the newly found gold would be kept in Treasury or Fed vaults or whether the Treasury/Fed would attempt to reduce its holdings of gold by an amount corresponding to the newly found gold. If the markets expected that the newly found gold would find its way into non-monetary usage, the markets would anticipate a reduction in the real value of gold, implying that nominal prices of goods would rise relative to the fixed nominal price of gold. So there would be some inflation in that case.

    Sorry I have never heard of a paper by Godley and Lavoie. Can you tell me something about it and provide me with a link to it? Thanks.


  31. 31 Tom Brown September 11, 2013 at 9:12 am

    Thanks David!

    You give a very good answer I think. Yes, case B is the gold standard. Assume the Fed follows the same rules as it does now (semi independent of Tsy, etc). Yes the coins are for sale as all currency is for sale, and yes the gold standard is in effect. Assume the coins are stamped with a face value reflecting the unit of account (i.e. reflection how many oz a dollar is defined as).

    In case A you can assume a situation similar to today where the MOA is defined to be the basket of goods in the CPI and the UOA defines a specific sized slice of that basket of goods (i.e. how much a dollar will buy you). But you can assume the Fed targets 0% inflation. There is no convertibility of Fed dollars to these slices though via the Fed.

    Now that I think about it, in my case B I’m not sure what policy the Fed follows. On the gold standard does it have the power to even target inflation = 0%? Perhaps not. If it did, and by pure luck no other gold was ever found (say it was a significant amount) could they keep inflation at 0%?

    So if on the gold standard I’m not sure what anyone would purchase the gold at the Fed with. More gold? Bonds?

    No need to answer further. Like I say, I think you gave as good an answer as possible.




  32. 32 Tom Brown September 11, 2013 at 10:12 am

    David! I’m sorry about that Amazon.com link!… I didn’t mean to turn your blog into an advertizement … especially for a book on “Monetary Economics” that you’ve never heard of! Shoot!… I had no idea it would appear as a nearly actual sized book. Ha! Feel free to delete my comment if necessary!

    (BTW, by chance the NYT did an article about Godley today!)

    I’ll repost the rest of my comment here in case you need to delete the other:

    Thanks David!

    You give a very good answer I think. Yes, case B is the gold standard. Assume the Fed follows the same rules as it does now (semi independent of Tsy, etc). Yes the coins are for sale as all currency is for sale, and yes the gold standard is in effect. Assume the coins are stamped with a face value reflecting the unit of account (i.e. reflection how many oz a dollar is defined as).

    In case A you can assume a situation similar to today where the MOA is defined to be the basket of goods in the CPI and the UOA defines a specific sized slice of that basket of goods (i.e. how much a dollar will buy you). But you can assume the Fed targets 0% inflation. There is no convertibility of Fed dollars to these slices though via the Fed.

    Now that I think about it, in my case B I’m not sure what policy the Fed follows. On the gold standard does it have the power to even target inflation = 0%? Perhaps not. If it did, and by pure luck no other gold was ever found (say it was a significant amount) could they keep inflation at 0%?

    So if on the gold standard I’m not sure what anyone would purchase the gold at the Fed with. More gold? Bonds?

    No need to answer further. Like I say, I think you gave as good an answer as possible.



  33. 33 David Glasner September 29, 2013 at 8:39 am

    Tom, OK, don’t worry about the add; not a problem


  34. 35 Tom Brown January 18, 2014 at 8:53 pm

    Hi David, I’m leaving you another comment here so as not to sideline the discussion under one of your regular posts.

    The reason for this comment is to try to bounce (very briefly) a few ideas off of you to see if I’m at all close. I chose you because you seem very intelligent and patient with people, and these are some super rookie questions! I’ve been reading various econ blogs for a couple of years now, but I have absolutely no formal education in economics nor any exposure professionally to the fields of finance or anything like that. I’m just interested for my own purposes. I’m intrigued by Market Monetarism, and I’ve developed a wee bit of understanding of some of the principals, but I was thinking it’d be nice to bounce some of my bigger picture intuitions about the subject off of somebody such as yourself to see if I’m at all close. OK, I’ll try to keep this very brief:

    1. It seems to me that most MMists are neo-liberal, small government, Milton Friedman fans who have a strong preference for markets, minimal regulation, and “practical” libertarian beliefs. I don’t think those ideas are required to be an MMist, but I think that’s the trend.

    2. If I’m not mistaken, “Say’s Law” relates to the above in the following way: if the economy used barter instead of money, then in order for an individual to trade effectively he must A) produce B) produce in excess (of his own needs) goods or services that others in the market would find valuable to trade for. You don’t produce, you don’t eat. This is a kind of libertarian or neo-liberal ideal market economy, and one should strive to achieve it, but practically money offers lots of advantages (convenience, store of value, etc), so let’s be practical about it and try to approach the barter economy ideal but with the advantages of using money.

    3. MMists see a 5% NGDPLT scheme for the CB as a practical means of “eliminating the money illusion” … i.e. the problems associated with money (such as sticky wages and prices) that prevent a society using money from approaching the perfect Say’s Law barter economy. The purpose of NGDPLT is to smooth out the effects of supply or demand “shocks” and prevent them from doing unnecessary things to the economy such as creating an excess demand for money which in turn can lead to an unnecessary recession or even depression. NGDPLT won’t cure booms or busts or “structural problems” but it will tend to eliminate “unnecessary” problems which arise due to the weirdness of money.

    How’d I do? I know there’s a lot more too it. You can stop reading at this point, I just provided the following paragraph to give you some idea of my extremely limited “background” with macro:

    Just to give you a little background, I have a rudimentary idea of the hot potato effect, “Chuck Norris,” the EMH (and why Sumner thinks bubbles don’t exist), what aggregate demand is (AD), what the difference is between fiscal and monetary policy, monetary offset, “never reason from a price change” (and related phrases), the mechanism of QE, the importance of expectations, the neutrality of money (and the equation of exchange), the “convenience yield” (as JP Koning puts it), and what NGDP and NGDPLT are and how they differ from inflation targeting, Tobin’s papers, the difference between MOA and MOE, and I read Rowe, Sumner and Koning on a fairly regular basis. Woolsey, Beckworth, Nunes and Christensen I read less frequently. You I read a moderate amount, but many of your articles go over my head for the most part, and I just don’t have time to fight my way through them (I do like to skim them though and see if there’s something I can latch onto in the middle). A few of your articless I’ve found to be super interesting and I went through them slowly and in great detail. I’m also a reader of some post-Keynesian types who like to emphasize some of the accounting aspects, though I’m no expert there either. I have even less idea what traditional monetarists, new Keynesians, and Austrians are all about, but I do have an inkling, and could maybe fake my way through an explanation to a man off the street that knows even less than I do.

    If you make it all the way through that, thanks for your patience!


  35. 36 David Glasner January 19, 2014 at 12:46 pm

    Tom, I think point 1 is generally correct, though I am not that much of a Friedman fan myself. I really don’t get why you would discuss Say’s Law or a barter economy in terms of Market Monetarism. Especially after you devote point 1 to Friedman, Say’s Law seems way out of place. I would be shocked if you could find even a single mention of Say’s Law in Friedman’s published output. What does transacting using money or by barter have to do with how much income redistribution takes place? On point 3, I think you are generally on the mark. I’m glad to know that you have found some of what I write helpful. I appreciate the feedback about what I write that you regularly provide. Keep on reading.


  36. 37 Tom Brown January 19, 2014 at 8:33 pm

    David thanks so much for your feedback and the kind words!

    New question for you:

    If an NGDP futures market was off the table for some reason, could you devise an algorithm to control traditional Fed tools (like OMOs) to replace the human Fed decision makers? Even if you think human judgement would be better than an algorithm, do you think it’s possible to do NGDPLT with an algorithm? If so, would you publish the details of the algorithm so it was public knowledge? Why or why not?


  37. 38 Tom Brown January 19, 2014 at 10:28 pm

    … perhaps something as simple as the classic generic PID (proportional/integral/derivative) controller, that engineers have been using for umpteen years now, would suffice:


    All you’d need to do is select the coefficients Kp, Ki, and Kd … not trivial perhaps, but maybe at least fairly straightforward (given access to the requisite data)?


  38. 39 Tom Brown February 11, 2014 at 1:29 pm

    David, I tried to refine my question to you above about “bouncing ideas” off of you regarding Market Monetarism, Say’s Law etc: the result was a much more succinct question to Nick Rowe, essentially seeing if I was correct about his concept of good monetary policy I wasn’t (no surprise), but he did offer up this gem as his own summary:

    “…the goal of good monetary policy is to try to make Say’s Law true.”

    I just re-read our previous interchange above…. and based on that I suspect you might disagree with Nick here. Your thoughts?


  39. 40 withheld November 23, 2014 at 4:43 am


    I’m engineer working on developing a theoretical model of protectionism based on the belief that QTM is a defective model of money. As a result, I have interest in monetary theory and was wondering if you could publish a very brief summary of Hawtrey’s key points.

    I’m looking for critique of my thinking and have provided the following link for consideration:


    I was also wondering if you associate yourself with any particular school of economics?

    thank you


  40. 41 csissoko January 2, 2015 at 12:57 pm

    Hi David,

    I just posted a paper on early banking theory, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2544733, and would love to get your comments, if you find it interesting enough to take a look. My focus was always on Henry Thornton, so I’m not sure I have a very good understanding of Hawtrey.

    email: csissoko5 at gmail.com

    Thank you for a great blog!


  41. 42 David Glasner January 4, 2015 at 8:04 am

    csissoko, Thanks for the link, I will try to have a look at your paper in the near future. I glad to hear that you like my blog.


  42. 43 Daniel January 14, 2015 at 7:30 am

    I don’t suppose you have any interest in uploading Hawtrey’s written works onto wiki source? If you firmly believe in his views, the above idea would be an excellent way of disseminating his views to the world, in the broadest manner, in the most inexpensive ways… I just recently finished reading a work of Irving fishers on wikisource and regretted the fact that there was a dearth of material in economics.


  43. 44 David Glasner January 18, 2015 at 9:20 am

    Daniel, Thanks for the suggestion. I’ve never looked at Wiki source, so I will have to go there and learn how to upload.


  44. 45 Peter Golovatscheff October 13, 2015 at 12:31 am

    Hi David,

    I’m new to your blog. I really liked your latest post on representative agents (although I’m not a trained economist)! Thanks.

    What really got me interested, though, is Hawtrey. I haven’t seen too many people mentioning his name. I wonder what you think of the following quote from Hawtrey’s “Currency and Credit”, and what would you answer to me if I were to argue that Hawtrey describes the system as it is today (i.e. money does not exist, other than in “money of account” sense):

    “Suppose then that society is civilised, and that money does not exist. Goods are brought to market and exchanged. But even though there is no medium of exchange, it does not follow that they must be bartered directly for one another. If a man sells a ton of coals to another, this will create a debt from the buyer to the seller. But the buyer will have been himself a seller to someone else, and the seller will have been himself also a buyer. The dealers in the market can meet together and set off their debts and credits. But for this purpose the debts and credits, which represent the purchase and sale of a variety of goods, must be reduced to some common measure. In fact a unit for the measurement of debts is indispensable. Where a commodity is used as money, it naturally supplies the unit for the measurement of debts. Where there is no money, the unit must be something wholly conventional and arbitrary. This is what is technically called a ”money of account”. Even when money is used, it may occasionally happen that the unit for the calculation of debts diverges in some degree from exact correspondence with the money in circulation. In that case the distinction between money and money of account immediately becomes a practical one. The value of the standard coin will be quoted in terms of the money of account, and varying amounts of the standard coin will be needed to pay a given debt. This is an approximation to the state of affairs which we are assuming. But however conventional and arbitrary the unit may be, once it is established as the basis of the debts and prices and values of a market, it is bound to assume a certain continuity.
    Each dealer in the market calculates his own command of wealth in the same unit; it affords the basis for his valuation both of what he wants to buy and of what he wants to sell, and he looks for only such divergence from the previous prices as variations of supply and demand will justify. The total effective demand for commodities in the market is limited to the number of units of the money of account that dealers are prepared to offer, and the number that they are prepared to offer over any period of time is limited according to the number that they hope to receive. Therefore, arbitrary as the unit is, capricious variations in its purchasing power will not occur.
    (p. 2)”

    I don’t know if my argument that “money” doesn’t exist sounds crazy, but what is surely crazy is that if we look at our economy from this viewpoint (which is difficult to adopt as one needs to forget all kinds of conventional wisdom), everything seems to make sense. “Money” is replaced by ‘credit balances’ (cash refers to a credit balance in central bank ledger) and it’s all about bookkeeping (denominated in the “money of account”), nothing else. Credit and debit entries, tracking credit/debt relationships that arise from buying and selling. (If you’re aware of Alfred Mitchell-Innes’ writings, this might ring a bell.)

    Give it a thought? I’ve been building my understanding of the economy on these premises for a while now (I’m writing a paper), and I’m more than happy to elaborate if you find anything interesting in this.


  45. 46 philipji December 18, 2015 at 11:01 pm

    Prof Glasner,
    In one of your posts above you said that “Increasing interest rates increases, not, as you assert, reduces, the velocity of circulation.”

    You might be interested in one of my posts where I show that the velocity of money has exactly mirrored interest rates over a period of more than half a century.


    From the graph you may conclude that interest rates alone completely explain the velocity of money. My measure of velocity uses a measure of money that I have drawn up and call “Corrected Money Supply”.


  46. 47 Paul Kasriel March 7, 2019 at 8:18 am

    I hope you will write a commentary critiquing Modern Monetary Theory for this ancient monetary theorist.


  47. 48 David Glasner March 7, 2019 at 9:07 am

    A worthy endeavor, no doubt. But right now I don’t have the patience. I will let others do the heavy lifting.


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About Me

David Glasner
Washington, DC

I am an economist in the Washington DC area. My research and writing has been mostly on monetary economics and policy and the history of economics. In my book Free Banking and Monetary Reform, I argued for a non-Monetarist non-Keynesian approach to monetary policy, based on a theory of a competitive supply of money. Over the years, I have become increasingly impressed by the similarities between my approach and that of R. G. Hawtrey and hope to bring Hawtrey’s unduly neglected contributions to the attention of a wider audience.

My new book Studies in the History of Monetary Theory: Controversies and Clarifications has been published by Palgrave Macmillan

Follow me on Twitter @david_glasner


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