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  5. Retrospectives: Economists and the Fed: Beginnings

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Retrospectives: Economists and the Fed: Beginnings

  • Perry Mehrling
Journal of Economic Perspectives
vol. 16, no. 4, Fall 2002
(pp. 207–218)
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Abstract

As usually understood, the significant debate over the founding of the Fed was between advocates of the real bills doctrine and advocates of the quantity theory of money. This understanding however conflates two different distinctions: one between the banking principle and the currency principle, and one between self-regulation and active management. It also fails to take seriously both the context of practical experience with the national banking system and the developing practical experience inside the Fed. I propose a new interpretation focused mainly on the contributions of four economists: J. Laurence Laughlin, Irving Fisher, Paul Warburg and Benjamin Strong.

Citation

Mehrling, Perry. 2002. "Retrospectives: Economists and the Fed: Beginnings ." Journal of Economic Perspectives, 16 (4): 207–218. DOI: 10.1257/089533002320951046

JEL Classification

  • E58 Central Banks and Their Policies
  • N22 Economic History: Financial Markets and Institutions: U.S.; Canada: 1913-
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