Open AccessLéon Walras and Augustin Cournot on the Regulation of Paper Money: Rules vs. Discretion at the End of the 19th Century
Author(s) -
Andrés Álvarez
Publication year - 2020
Publication title -
iberian journal of the history of economic thought
Language(s) - English
Resource type - Journals
ISSN - 2386-5768
DOI - 10.5209/ijhe.69402
Subject(s) - economics , fiat money , cournot competition , discretion , endogenous money , quantity theory of money , keynesian economics , monetary economics , monetary policy , neoclassical economics , mathematical economics , law , political science
This paper compares Léon Walras’ and Augustin Cournot’s views on monetary regulation. It shows that whereas Cournot believed discretionary monetary regulation to be convenient and acceptable, Walras held that the only acceptable monetary system is based exclusively on the stability of the value of money under a monetary rule following a strict equivalence between metallic reserves and a pure medium of exchange form of money. The paper also advances Cournot understood more clearly than Walras the evolution of the monetary system of their days because Walras was trying to guarantee the coherence of his pure theory with his applied theory, which made him unable to accept the evolution toward a monetary system based on fiat money.