Is the law of reflux valid?

Arbeitspapier

In the classical monetary debates, the Banking School held that notes would be equally demand-elastic whether supplied by many or a single issuer. The Free Banking School held that notes would be less demand-elastic if supplied by a single issuer. These assertions have rarely, if ever, been subject to more stringent statistical testing. In this paper I compare the elastic properties of the note stock of the Swedish note banking system in 1880-1895 with those of the regime in 1904-1913, when the Bank of Sweden held a note monopoly. Evidence suggests that notes did not become less elastic after monopolisation, thus lending support to the views of the Banking School.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SSE/EFI Working Paper Series in Economics and Finance ; No. 599

Classification and Topics

• Classification: Wirtschaft ; History of Economic Thought: Classical (includes Adam Smith) ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; Money Supply; Credit; Money Multipliers ; Central Banks and Their Policies ; Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Europe: Pre-1913 ; Economic History: Financial Markets and Institutions: Europe: Pre-1913
• Subject: Banking School ; Free Banking School ; Elastic currency ; Clearing mechanism ; Needs of trade ; Law of Reflux ; Real bills doctrine ; Banking-Schule ; Free Banking ; Verrechnungsverkehr ; Geldmenge ; Zentralbank ; Geldangebot ; Monopol ; Schweden

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hortlund, Per
• Event: Veröffentlichung
• (who): Stockholm School of Economics, The Economic Research Institute (EFI)
• (where): Stockholm
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/56324
• Last update: 10.03.2025, 11:45 AM CET