BANKING AND THE ROLE OF MONEY. THORNTON, HENRY. 1760-1815. An Enquiry Into The Nature and Effec...

BANKING AND THE ROLE OF MONEY. THORNTON, HENRY. 1760-1815. An Enquiry Into The Nature and Effects of the Paper Credit of Great Britain. London: J. Hatchard; F. and C. Rivington, 1802. 8vo (217 x 130 mm). Half-title. Half tan calf over marbled paper boards, morocco lettering piece, spine gilt, by Sotheran, small slip of manuscript inserted at p 313. Custom cloth folding case. Provenance: Hon Stanley C. Wisniewski (pencil inscription). FIRST EDITION of the most important analysis of banking and the role of money in the economy written in the nineteenth century. Thornton's groundbreaking work was a careful dissection of both the domestic and international impacts associated with the expansion of the money supply. Thornton (1) traced the effect of a change in the quantity of money on the interest rate and, thereby, on prices; (2) analyzed the effects of monetary expansion resulting from a difference between the market rate of interest and the 'natural rate of interest' (defined as the anticipated yield of new investment); (3) identified the effects of a divergence between the real and nominal rates of interest; (4) related the quantity of money not only to the price level, but also to its influence on the level of output and (5) was among the earliest economists to have noted the relation between changes in the rate of interest and the flow of short-term funds from abroad. Paper Credit provides 'a complete account of the English monetary system: not only the circulation of money, but also a detailed discussion of how the Bank of England should act to prevent instability, and also how to deal with instability whenever it occurred' (ODNB). Goldsmith 18526; Kress B-4612. For further information on this lot please visit Bonhams.com For further information about this lot please visit the lot listing