Real Bills Doctrine

Dictionary Says

Definition of 'Real Bills Doctrine'

An economic theory that surmises that when central banks loan money only for "productive" projects the loans will not be inflationary. The Federal Reserve Act of 1913 was based in part on the Real Bills Doctrine, which asserted that the creation of money would automatically be directed to real goods and services if the central bank and banks provided credit only to short-term, self-liquidating loans. The Real Bills Doctrine has been completely discredited since 1945 by most economists.
Investopedia Says

Investopedia explains 'Real Bills Doctrine'

Opponents of the Real Bills Doctrine emphasized that all monetary creation is inflationary, regardless of how the money is used or what types of projects the loan will support. Some economists place blame on the Real Bills Doctrine for the Federal Reserve policy during the Great Contraction and Great Depression of the late 1920s and early 1930s.

Articles Of Interest

  1. How The U.S. Government Formulates Monetary Policy

    Learn about the tools the Fed uses to influence interest rates and general economic conditions.
  2. Stagflation, 1970s Style

    Find out how Milton Friedman's monetarist theory helped bring the U.S. out of the economic doldrums.
  3. What Was The Glass-Steagall Act?

    Established in 1933 and repealed in 1999, the Glass-Steagall Act had good intentions but mixed results.
  4. Ben Bernanke: Background And Philosophy

    Get some insight into the man at the forefront of key U.S economic decisions.
  5. What Caused The Great Depression?

    Learn how government actions may have contributed to this major economic downturn.
  6. Exploring The Current Account In The Balance Of Payments

    Learn how a country's current account balance reflects the country's economic health.
  7. Taking Shots At CAPM

    Find out why many investors think the capital asset pricing model is full of holes.
  8. George Soros: The Philosophy Of An Elite Investor

    George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular.
  9. Understanding And Playing The Dow Jones Industrial Average

    Learn strategies for investing in this price-weighted index and how to interpret its movements.
  10. Introduction To International CAPM

    ICAPM is one of several models used to determine the required return on an asset, discover its limitations and how to use it.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.
  2. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.
  3. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.
  4. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
  5. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
  6. Dead Presidents

    Slang referring to U.S. paper currency. Dead presidents can refer to any unit of currency, but most often refers to George Washington, whose picture is on the $1 bill.
Trading Center