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...

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...

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...

A long-standing but unsettled controversy concerning monetary experiences in colonial America has recently been reopened with considerable vigor. Ignoring doctrinal aspects, the main substantive issue concerns the relationship between money holdings and price levels during episodes in which...

This article evaluates the efficiency of a requirement that private issuers redeem inside money on demand at par in a random-matching model of money where the issuers of inside money are imperfectly monitored. I find that for sufficiently imperfect monitoring, a par redemption requirement leads...

One of the fundamental questions concerning inside money is whether its issuers should be regulated and how. This paper evaluates the efficiency of one prevalent regulatory recommendation - a requirement that private issuers redeem inside money on demand at par - in a random-matching model of...

In the classical monetary debates, the Banking School held that notes would be equally demand-elastic whether supplied by many or a single issuer. The Free Banking School held that notes would be less demand-elastic if supplied by a single issuer. These assertions have rarely, if ever, been...

A long-standing but unsettled controversy concerning monetary experiences in colonial America has recently been reopened with considerable vigor. Ignoring doctrinal aspects, the main substantive issue concerns the relationship between money holdings and price levels during episodes in which...