By Prof. Pedro Schwartz (IIMR, IEA fellow)

B. Ll., Dr. Iuris (Madrid), MSc. Econ., PhD. (LSE)

Pedro Schwartz’ s bio available at:

  • 16th July – 1st August (selected days, see programme below). At the University of Buckingham (Vinson Building, Hunter street campus. Buckingham, MK18 1EG
  • Event open to the public. RSVP
  • The lectures will be recorded and made available to the public afterwards on the IIMR YouTube channel

What the lectures will cover

The institution of money is not at the centre of the research programmes of mainstream macroeconomics. In most models proposed by the profession money is inserted as an afterthought – if at all. This contrasts with the importance generally attributed to financial and monetary institutions when analysing the political economy of crashes such as the Great Recession and its aftermath. History can help remedy this contradiction. Since money is such an abstract institution the same problems recur across time and place, so that the study of past and present monetary theories will turn out to be surprisingly relevant in the present moments of perplexity.

Programme and Lectures’ topics

16th July; 17:15 – 18:30.

Lecture 1. – The institution of money. – Two theories about the origin of money: the reduction of the transaction costs of barter (Carl Menger); or the recording of debt and its cancellation (New Chartism, Knapp 1905, Lerner 1947). – Narrow and broad money. – Adam Ferguson: the emergence of institutions. – Fractional reserve and Bank money. The money multiplier. – Network goods: Digital currencies.

17th July; 17:15 – 18:30.

Lecture 2. – The ‘Quantity Theory’. –  Azpilcueta, Bodin, Cantillon, Hume, Smith, Fisher, Cambridge England, Friedman. – The problem of small change. – Thornton’s Paper Credit. – Developments:  bank notes; deposits. – Theories of inflation: Keynes v.Friedman. – Monetarism. – Expectations and velocity: adaptive (Friedman) and rational (Muth, Lucas). – Heresies: money and growth (the Phillips curve); debt and growth (‘Modern Monetary Theory’).

31st July; 17:15 – 18:30.

Lecture 3. – Money in an open economy. – Hume and the self-regulating specie flow model. – The gold standard: problems: bimetallism. – David Ricardo and Bullionism. -The controversy around Scottish Free Banking. – The Currency School v. the Banking School. – J.S. Mill’s half-way house; monetary competition. – Keynes’s Tract and the management of fiat money. Keynes at Bretton Woods. – Lender of last resort. – Friedman on flexible exchange rates. – Harry Johnson’s monetary theory of the balance of payments. – Mundell’s impossibility triangle.

1st August; 17:15 – 18:30

Lecture 4. –  Central banking. – Central banks and government. – Thornton’s 1802 Paper Credit. – Ricardo’s Economical and Secure Currency (1816). – Robert Peel’s 1844 Act. -J.S. Mill on central banking.  – Walter Bagehot’s Lombard Street. – Rules or discretion: Milton Friedman on central banking. – Robert Lucas’s critique of macroeconomic models. – Monetary or fiscal policies; the new Keynesians. – Tim Congdon: Money supply and nominal GDP. – Hayek on the privatisation of money.