Abstract
In determining the relative importance of proximate determinants, this study has suggested that the public was most important, followed by the banks and high-powered money. This seems to be consistent with Cagan's findings for a gold standard system over a period in which the money stock decreased at a very slow rate and banking crises were prevalent and serious. With respect to the monetary controversy, the comparison of views of the two schools with the empirical results suggests that the Banking School's estimation of the relative importance of the proximate determinants for causing changes in bank liabilities was more accurate than the Currency School's. Among the numerous questions left unanswered by this study are the following: What economic factors affected the proximate determinants in this period? What is the relationship between the money stock and economic activity? What is the direction of causality between economic activity and the moneey stock? Answers to these questions require further work.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
