Research Topics

Retracing European and Chinese Monetary Thoughts on Chartalism, Nominalism, and the Origins of Monetary Systems

A monetary approach that combines Chartalism, Nominalism, and Command origins of monetary systems is often deemed to have emerged only recently, while the Aristotelian approach (Commodity, Metallism, and Market origins of monetary systems) is the only one that existed until the end of the eighteenth/early-nineteenth century. In the major studies of the history of monetary thought, the Chartalism-Nominalism-Command approach is mostly left unmentioned, or at best reduced to an incoherent banality. The paper shows that this approach has a long and rich intellectual history among European monetary thinkers. In Europe, Plato was its first exponent, albeit in a very rudimentary way, and so one may call it the “Platonic approach.” It is developed by Roman legists (such as Javolenus, Paulus, and Ulpian) and Medieval legists (such as Du Moulin, Hotman, and Butigella) who note that coins are similar to securities and that debts are serviced when nominal sums are paid rather than specific coins tendered. During the Renaissance and early modern period, a series of scholars and financial practitioners (such as Law, Dutot, Thomas Smith, and James Taylor) emphasize the financial logic behind monetary mechanics and the similarity of coins and notes. In the twentieth century, authors such as Innes, Knapp, Keynes, and Commons build onto the groundwork provided by these past scholars. In China, the Chartalism-Nominalism-Command approach develops independently and dominates from the beginning under Confucian and Legist thoughts. They emphasize the statecraft origins of monetary systems, the role of tax redemption, and the irrelevance of the material used to make monetary instruments. Clay, lead, paper, iron, copper, and tin are normal and convenient means to make monetary instruments, they are not special/emergency materials. The essence of a monetary instrument is not defined by its materiality but rather by its chartality, that is, by the promise it embeds. The Platonic approach rejects the categories and conceptualizations used by the Aristotelian approach and develops new ones, which leads to a different set of inquiries and understanding of monetary phenomena, problems, and history.

The paper seeks to lay out a stock-flow-based theoretical framework that provides a foundation for a general theory of pricing. Contemporary marginalist economics is usually based on the assumption that prices are set in line with the value placed on goods by consumers. It does not take into account expectations, or the fact that real goods are often simultaneously assets. Meanwhile, contemporary theories of asset markets are flawed in that they either rely, implicitly or explicitly, on a market equilibrium framework or provide no framework at all. This paper offers a working alternative that relies, not on a market equilibrium framework, but rather on a stock-flow equilibrium framework. In doing so, we lay out a properly general theory of pricing that can be applied to any market—whether financial, real, or a real market that has been financialized—and which does not require that prices inevitably tend toward some prespecified market equilibrium.

Gender affects household spending in two areas that have been widely studied in the literature. One strand documents that greater female bargaining power within households results in a variety of shifts in household production and consumption. An important source of intrahousehold bargaining power is ownership of assets, especially land. Another strand examines gender bias in spending on children. This paper addresses both strands simultaneously. In it, differences in spending on education are examined empirically, at both the household and the individual level. Results are mixed, though the balance of evidence weighs toward pro-male bias in spending on education at the household level. Results also indicate that the relationship between asset ownership and female bargaining power within the household is contingent on the type of asset.