This chapter considers the law of reflux and its alternative interpretations: (1) as a monetary policy rule for stabilizing the price level and (2) as rule for individual banks to follow to remain liquid. The chapter argues that Adam Smith endorsed only the second interpretation, and that the...

Universal banking is one of the main components of Islamic banking. Islamic banks provide finance to enterprises through either sharing directly in the net results of their activities or financing their purchases of assets, goods and services on credit. We can therefore expect Islamic banks to...

Three centuries of events, episodes, and policy controversies reveal that certain classical theories of monetary policy have outperformed other theories whose superficial, albeit fallacious, logic makes them perennially popular with the general public, politicians, and even some policymakers....

The rise of Milton Friedman's version of monetarism in the 1960s and early 1970s provoked an antimonetarist backlash culminating in the late Nicholas Kaldor's The Scourge of Monetarism (1982). Friedman stressed the ideas of exogenous (i.e., central bank determined) money, money-to-price...