Quotes from Competition and Currency

By Lawrence White (1989)

• The rules-discretion conundrum presupposes the existence of a monetary authority whose behavior must be either dangerously inflexible or dangerously flexible. An evident means of resolving this dilemma is to cultivate a monetary system not under the rule of a central authority.#
  EconomicsMoney
• Bank note producers did not gain a foothold in the currency industry until they could produce trustworthy currency cheaply enough in competition with specie.#
  EconomicsHistoryMoney
• The question of a natural monopoly in the production of money is distinct from the question of an inherent market tendency toward convergence on a single monetary standard. . . . That all coins are manufactured of like metals in like weights, and that all notes and deposits are redeemable for standard coin, no more indicates a natural monopoly in money production than that the standardization of brick composition and size indicates a natural monopoly in brick production.#
  EconomicsMoney
• From a subjectivist perspective, it is clear that the defining set of attributes of money is to be sought in the role that money plays (and alone plays) in the plans of individual economic agents. This immediately rules out approaches that focus on the statistical behavior of an aggregate as the essential criterion for deciding whether components of that aggregate ought to be considered money. Moneyness is a property conferred an item by individuals’ plans, not by the econometric performance of an aggregate containing that item relative to an aggregate omitting it.#
  EconomicsMoney

F.A. Hayek, Denationalisation of Money (1976)

• As regards Professor Friedman’s proposal of a legal limit on the rate at which a monopolistic issuer of money was to be allowed to increase the quantity in circulation, I can only say that I would not like to see what would happen if under such a provision it ever became known that the amount of cash in circulation was approaching the upper limit and that therefore a need for increased liquidity could not be met.#
  EconomicsMoney

Robert Barro, “United States Inflation and the Choice of Monetary Standard” (1982)

• Telling the Federal Reserve to select substantially different values – usually lower values – for monetary growth seems similar to urging firms and households to choose different numbers for prices, unemployment, production, and so on. As in the private sector, it is reasonable to view the Fed’s monetary decisions as emerging from a given structure of constraints and rewards.#
  EconomicsPoliticsMoney