Competition and Monopoly in the Federal Reserve System, 1914-1951: A Microeconomic Approach to Monetary History (Studies in Macroeconomic History)

Many economists view competition among central banks as leading to an over-issue of money. This book challenges the conventional wisdom by showing that competition among Federal Reserve banks in the 1920s did not result in an over-issue problem. The US Congress imposed a more monopolistic structure on the Fed in the mid-1930s so that it could accomodate an increase in the revenue needs of the Treasury. This book is unique in emphasizing the evolution of the Fed's structure from a highly competitive one to a highly monopolistic one. Competition among central banks in a monetary union is thought to result in an over issue problem, which has its roots in the view that moneys produced by competitive central banks are perfect substitutes for each other. In the conventional set-up over issue can be overcome by granting a central bank exclusive rights to conduct monetary policy. In this book Mark Toma explores the workings of the early Federal Reserve System as a basis for challenging the conventional wisdom. He is able to show that competition among reserve banks in the 1920s did not result in an issue of Fed money. Rather the main effect of competitive structure was to cause reserve banks to make substantial interest payments to the private banking system in place of transfers to the US government. The book emphasizes the evolution of the Federal Reserve from a competitive to a monopolistic structure Many economists view competition among central banks as leading to an over issue of money. This book challenges the conventional wisdom by showing that competition among Federal Reserve banks in the 1920s did not result in an over issue problem. The US Congress imposed a more monopolistic structure on the Fed in the mid-1930s so that it could accomodate an increase in the revenue needs of the Treasury. This book is unique in emphasizing the evolution of the Fed's structure from a highly competitive one to a highly monopolistic one. In this book Mark Toma explores the workings of the early Federal Reserve System as a basis for challenging the conventional wisdom that competition among central banks in a monetary union results in an over issue problem. The book emphasizes the evolution of the Federal Reserve from a competitive to a monopolistic structure. Imagine that you have just received the latest textbook in advanced micro-economics theory. Mark Toma. Includes Bibliographical References (p. 127-130) And Index.