Comment on Robert Hall's 'Controlling the Price Level'

摘要

James Tobin discusses Fisher's compensated dollar plan and Robert Hall's proposal for controlling the price level. Fisher's idea was quite simple. It applies to a commodity, or "representative," currency as distinguished from fiat money. In Fisher's day, paper money and token coin were the predominant means of payment. The public exchanged them for real commodities, in other words, for goods and services for consumption or for the making of consumption goods. The value of currency in goods, v, was free to move in markets from day to day. The currency was at the same time redeemable by the government for one or more particular real goods, at an administratively set rates, x units of currency for one unit of a standard good. At these rates the government promised either to buy or sell. Both the United States and Britain set prices of their currencies in two standards, silver and gold, through most of the 19th century. But at the time Fisher was advocating the proposal Bob Hall is reviving today, silver had lost its status as a standard.