Anthony M. Endres

Monetary thought and the analysis of price stability in early twentieth century New Zealand

We consider the state of monetary thought in New Zealand and the international transmission of monetary ideas to New Zealand with reference to the report and minutes of evidence of the Royal Commission on the Cost of Living in New Zealand (1912). The paper recovers several New Zealanders as genuine theorists of political economy and of monetary thought in particular. In their disquisitions the political economists expounded, with varying degrees of subtlety, older classical and contemporary neoclassical ideas. Right, Segar and McIlraith held monetary theories of the price level and proceeded beyond the classical cost of production theory of the natural value of money by exploring how and why a change in the price level follows a change in the quantity of money and credit. They did not understand all the intricacies of the Australasian sterling exchange standard, but what they had to say on price level adjustments in an open economy was perfectly coherent and defensible.