Discussion — Reading 5: John Hicks

This session covers Reading 5: Three chapters from A Market Theory of Money by John Hicks (1989).

• Hicks Study Questions

In these three chapters, Hicks starts with the idea that the primary function of money is to serve as a "standard of value" for the market. The function of money, as a standard, is to reduce commodities to a common measure. From there, he argues that the institution of banking as market making naturally emerges from the need for a smoothly operating payments system.

From the course website:

"This is the last book Hicks wrote in his very long career, and it represents a change of views about the appropriate direction for monetary theory. In his earlier work he had advocated thinking about money as a special kind of commodity, and using the analytical apparatus of supply and demand as a way to do monetary theory. Here at the end of his career, he proposes instead that we think of banks as a special kind of dealer. In a sense, this entire course represents my attempt to pick up and develop the suggestion of Hicks."

See also Perry Mehrling's 2017 intellectual biography of John Hicks.

• The Monetary Education of John Hicks

Money and Banking Summer 2023 Reddit Master Thread