Selgin (2009) questions the practicality of 100 percent reserve requirements applied to small change. He interprets the private coinage of small change in 18th century England as embodying fiduciary media and concludes that requiring 100 percent reserves would have led to very high costs. This paper provides an alternative interpretation of the private coinage episode in England as embodying money itself, not fiduciary media, and uses historical details in Selgin (2008) as support of that interpretation. This leads to a discussion of the Misesian typology of money and his distinction between money and money substitutes.
Saturday, October 1, 2011
Nair on Small Coins as Money
The most recent issue of the Quarterly Journal of Austrian Economics includes Malavika Nair's important article "Money or Money Substitutes? Implications of Selgin's Small Change Challenge." Her article serves as an explict rebuttal of George Selgin's arguments in "100 Percent Reserve Money: The Small Change Challenge," asserting that the coinage of small change in 18th Century England was an example of fiduciary money. The article's abstract reads as follows:
Nair's article won the Richard E. Fox First Prize at the most recent Austrian Student Scholars Conference hosted here at Grove City College this past February.