Cameron Harwick

Hi, I’m Cameron Harwick

I’m an economics PhD candidate in Virginia with an interest in monetary theory,
institutional evolution, and folk music. Read More ►
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My research centers on the preconditions of monetary exchange, the practice of monetary policy, and their relevance to social cooperation.

Published Research

  • Money and Its Institutional Substitutes: The Role of Exchange Institutions in Human Cooperation

    Forthcoming – Journal of Institutional Economics

    This paper offers an increasing returns model of the evolution of exchange institutions building on Smith’s dictum that “the division of labor is limited by the extent of the market”. Exchange institutions are characterized by a tradeoff between fixed and marginal costs: the effort necessary to execute an exchange may be economized by up-front “investment” in strategies to facilitate the publication and accounting of trading histories. Increases in the size of the exchange network select for higher-fixed-cost exchange institutions, beginning with autarky, through various intermediate stages, and finally to mass monetary exchange. By identifying the relevant fixed costs of money and its institutional substitutes across time, the paper both accounts for the persistence of premonetary exchange institutions, despite the “inevitability” of monetary exchange that seems to be a feature of traditional models of the origin of money, and illuminates the forces driving the transition from one to another.

  • Cryptocurrency and the Problem of Intermediation

    Spring 2016 – Independent Review, vol. 20, no. 4.

    Though Bitcoin currently enjoys a healthy niche, the aspirations of many in the project are grander: to supplant the existing regime of fiat currencies with cryptocurrencies, and to do so outside of normal political channels. Its primary practical obstacle is its purchasing power volatility, arising from a rigid money stock in the face of wide swings in demand. Nevertheless, the historical example of gold, another (much more successful) money commodity with a more or less rigid supply, illuminates the institutional prerequisites for purchasing power stability, economic efficiency, and sustained growth – namely a market of financial intermediaries whose liabilities denominated in the base money themselves circulate as media of exchange. This paper discusses potential benefits and hurdles to establishing financial intermediation in cryptocurrency, as well as the possibility of managing the money supply to create a stable purchasing power cryptocurrency without the need for intermediation at all. Such schemes ultimately require an existing market of intermediaries in order to provide any benefits, the emergence of which governments are for the moment well-positioned to prevent.

Working Papers

  • Helicopters and the Neutrality of Money: An Essay in Loanable Fundamentalism

    Discussions of adjustments to the quantity of money tend to take for granted the method by which new money enters the economy. Milton Friedman, for example, famously assumed the central bank distributed money directly to agents via helicopter in order to abstract away from relative price effects, in contrast to the real world, where expansion almost always takes place through financial markets. This paper compares the distribution and relative price effects of expansion by helicopter and through financial markets. The distribution effects of the former will in fact be more severe than those of the latter, except in the sort of representative agent model Friedman used. This result is illustrated using an agent-based model in order to introduce heterogeneity in the demand for cash balances. Finally, we argue the helicopter metaphor is relevant to the emerging literature on money supply norms for crypto-currencies, which – unlike any modern currencies – must distribute changes in the money supply without the use of financial markets.

  • Boom, Bust, and Bubbles: A Mengerian Account

    The eclipse of capital-theoretic explanations of depressions by more straightforward monetary explanations in the decades following the Great Depression has obscured important questions that were asked by the older theory, even if it did not answer them satisfactorily. This paper offers an account of asset bubbles based in the dynamics of the asset’s moneyness, or liquidity. In doing so, it subsumes both the attribution of depression to an excess demand for money (and explains how this can be true despite central banks’ scrupulousness in avoiding falls in the money stock), and the observation of systematic capital misallocation over the course of the business cycle.

  • Giving Credit where Credit is Due: The Benefits of Bank Money — With Scott Burns

    Economists have long debated the relationship of bank credit to the business cycle. The attribution of economic cycles to the “inherent instability” of private bank money has been advanced by a number of prominent economists throughout history including Irving Fisher and University of Chicago icons like Frank Knight, Henry Simons, and a young Milton Friedman. The recent financial crisis has reignited these calls to abolish fractional reserve banking through “narrow banking” or “sovereign money” proposals. This paper rejects this notion and argues that the “pyramid of credit” plays a fundamental role not only in stabilizing economic activity but also in fostering economic development. The instability commonly attributed to pyramiding can be largely mitigated by policy changes far less drastic than the abolition of bank money, and any residual instability is almost certainly worth the dramatic benefits in normal times.


The most important thing a student can gain from an economics class is the ability to think like an economist: to be able to look at some event in the world and know how to interpret it using economic theory. More than familiarity with a few (or even a great many) models, it requires a strong economic intuition for knowing which model to apply to a given situation and why it’s appropriate. . . .

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