THOMAS TOOKE'S CONTRIBUTIONS TO MONETARY THEORY AND THE CURRENCY-BANKING POLICY CONTROVERSY

Abstract

Thomas Tooke, a prominent contributor to 19th century England's monetary theory and policy discussions, developed significant ideas during the Currency School-Banking School debates over the Bank Act of 1844. Tooke's ideas on credit money, endogeneity of money supply, interest rate, monetary transmission mechanism, balance of payments adjustments, and free banking have all been recurrent themes in the literature. However, Tooke's original ideas have been somewhat underappreciated. This paper provides a brief overview of Tooke's economic writings, focusing on his second period when he formulated his own ideas on money and prices, which became the basis of the Banking School position. The paper discusses the Currency School-Banking School controversy, Tooke's analytical framework, and its relevance to the policy debate.