Money performs its economic functions best when its value remains stable over time. This Article explores how that desideratum was achieved, or not achieved, under five identifiable monetary regimes in economic history. Transitions from one regime to another resulted from the demands of economic growth, which some regimes met better than others. The modern fiat money regime is optimal in most economic respects. Whatever amount of money needed to accommodate growth can be supplied at minimal costs. But political control over money creation can be used to increase the short-term control over economic resources of those in power and their constituents. When such debasements of money have occurred, the political economy of every regime interfered with achieving optimal long-term economic outcomes by unleashing inflation. How might the modern fiat money regime avoid that result?

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Political Economy of Supplying Money to a Growing Economy: Monetary Regimes and the Search for an Anchor to Stabilize the Value of Money
Richard Sylla1
1rsylla@stern.nyu.edu
Citation Information: Theoretical Inquiries in Law. Volume 11, Issue 1, Pages 1–27, ISSN (Online) 1565-3404, DOI: 10.2202/1565-3404.1234, January 2010
Publication History:
- Published Online:
- 2010-01-14


















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