Prof. Bryan Caplan

Econ 918

Spring, 1998

HW#4 (due at the final)

(Please type your answers to all questions, including any mathematics. Each answer should be approximately 1-1.5 pages in length, double-spaced).

1. Which of the international monetary systems analyzed by Bordo do you think worked the best? How far superior do you think your ideal system would work compared to the your most-preferred historical system?

2. Evaluate the practical significance of free-banking's MV stabilization theorem. Illustrate your critique mathematically using Selgin and White's notation.

3. Critique one of the alternative monetary regimes from the "New Monetary Economics" literature.

4. Would the Great Depression have been more severe if governments did nothing to deal with it? (Remember that at least in the U.S., the monetary base did increase during the GD!)

5. What can be learned about the Great Depression from European unemployment, and vice versa?