Two Theories of Money Reconciled: The Colonial Puzzle Revisited with New Evidence

No 11784, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The purported failure of the classical quantity theory of money in the colonial economy is shown to be a failure of data and not a failure of theory. When new data on the quantity of specie in circulation is added to the current data on paper money and prices, and econometrically estimated in both short- and long-run monetary models, the long-debated anomaly regarding the performance of the classical quantity theory of money in the colonial economy disappears. How paper money was backed and could be exchanged for specie was important, but not in the way theorists assert.

JEL-codes: E42 N11 (search for similar items in EconPapers)
Date: 2005-11
New Economics Papers: this item is included in nep-hpe, nep-mac and nep-mon
Note: DAE
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Citations: View citations in EconPapers (3)

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Working Paper: Two Theories of Money Reconciled: The Colonial Puzzle Revisited with New Evidence (2003)
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