Book reviews

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Notes

1 This is the potential problem that the ‘endowments’ of agents in such general equilibrium models may not suffice to keep them all alive, either via direct consumption of the endowment or via trading.

2 For example, a new machine enters a production cycle, in some process or industry, and leaves it at the end of that cycle as a flow of output of a one-cycle-old machine, joint with the output of the process or industry in the more usual sense (pp. 227–31).

1 The Poincaré lectures have been translated into English by O. Bjerkholt and A. Dupont-Kieffer, and are to be published as a monograph by Routledge.

1 All page references are to the O'Brien book under review.

2 ‘Loans constitute the majority of money’ (Arestis and Eichner 1988: 1017).

3 ‘The more the banks lend out, the more they increase the amount of money’ (Law 1705: chapter 3).

4 More on this asymmetric tendency in the era of the classical gold standard can be found in Spahn (2001).

5 O'Brien remarks that some Banking School writers stretched the concept of money ‘to an almost Radcliffian vagueness’ (p. 104). Interestingly enough, after some decades of financial innovation, official M3 definitions that are used also in ‘monetarist’ central banks come close to the Radcliffian notion of liquidity.

6 It should be noted that the use of the interest rate instrument in the beginning was meant to serve the profit motive of the Bank. Macroeconomic stabilization ensued as a by-product (cf. Ziegler 1990, Spahn 2001: chapter 4.5).

7 Goodhart (1999) challenges this widely held interpretation of Bagehot's suggestion and argues that the stipulated rate could well be at the contemporaneous level; the word ‘penalty’ rate would not appear in Lombard Street.