Re: Printing Money

[Paul Davidson <PB108928%UTKVM1.BITNET@xxxxxxxxxxxxxxxxx>]

FROM:  Paul Davidson
"      Holly Chair of Excellence in Political Economy
"      University of Tennessee, Knoxville, Tn. 37996-0550
But ultimately the ratio of "reserves" (i.e., base money) is an institutional
constraint. As long as people in the system are law-abiding, then the civil law

of contracts confers the essential function of money on what the State
declares as money.  As Keynes noted the State not only writes the dictionary
on money but also enforces it! A CHARTALIST view of money. IF people
lose faith in theState -- the civil law of contracts is not abided by --
and the scoity disintegrates. All this is covered ad length in
G. Davidson and P. Davidson, ECONOMICS FOR A CIVILIZED SOCIETY (1988).

Have a good day! Paul
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