Upon Daedalian Wings of Paper Money: Adam Smith and the Crisis of 1772 / Hugh Rockoff.

Format:

Book

Author/Creator:

Rockoff, Hugh.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15594.

NBER working paper series no. w15594

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Upon Daedalian Wings of Paper Money

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

Adam Smith advocated laissez faire for most sectors of the economy, but he believed that banking and finance required several forms of regulation including usury laws and the prohibition of small-denomination bank notes. Smith's support for banking regulation appears to have been a response to the shocks that hit the Scottish banking system during the time that he was composing the Wealth of Nations. The most important was the Crisis of 1772, which has been described as the first modern banking crisis faced by the Bank of England. It resembles the Crisis of 2008 in a number of striking ways. This paper describes the Crisis of 1772, the other shocks that hit the Scottish banking system, and the evolution of Smith's views on the regulation of banking. It is based on Smith's writings, the secondary sources, and a quantification of the new issues of Scottish bank notes during Smith's era.

Notes:

Print version record

December 2009.