Morgan Stanley Manuscripts

Monetary Policy, the Federal Reserve System, and Gold

January 25, 1980 – When this paper was published it kicked off a year in which potential restoration of the gold standard attracted widespread attention. My studies of economic history formed the basis of this forty-four page paper for Morgan Stanley Investment Research.

Barton Biggs wrote in his cover memo that Morgan Stanley had decided to publish it because, “Its message is of ultimate importance. This essay presents among other things what could be the economic and political issue of the 1980s…”

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The Case for the Gold Standard: Reflections on the Struggle for Financial Order

May 1981 – In recent years we have not had stable money. But we did have it throughout American history when we had a monetary standard — the gold standard. You can have a nominal money, a paper dollar; or you can have a real dollar, defined by its gold weight.

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Protectionism, Inflation, or Monetary Reform: The Case for Fixed Exchange Rates and a Modernized Gold Standard

November 1985 – One problem with recent gold and gold exchange standards, such as Bretton Woods, is that they have been implemented within a reserve currency system. In this Morgan Stanley paper, I trace the history of a reserve currency’s problematic impacts on trade.

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Gold in a Global Multi-Asset Portfolio

March 4, 1988 – The average increase in gold output over the long run has tended to gravitate to 2% — directly proportional to the average rate of gain in economic productivity since the onset of the Industrial Revolution. Despite famous big discoveries and much-talked-about new mining techniques, statistics over centuries show that a relatively constant quantity of labor and capital must be applied to produce a relatively stable quantity of gold. Thus, the supply of gold in the market tends naturally to stay proportional over the long run to the supply of goods and services — curiously similar to the stable money rule. This phenomenon helps to explain why gold became the natural measuring rod for trade and exchange and why it was selected as the monetary standard of early civilizations.

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