Working Papers

James Pennington's creativity as a scientific economist is matched only by his obscurity. He exemplifies the pioneering innovator who never gets his due recognition. Alone and with others he launched (1) the idea that checking deposits are money just like coin and notes, (2) the theory of the multiple expansion of bank deposits, (3) the currency principle according to which a mixed paper-metal currency can be made to behave as if it were entirely metallic, and (4) the notion that reciprocal demand fixes the terms of trade between the comparative cost ratios of two trading nations. Any one of these contributions should have made him famous. But they failed to do so and his name, neglected enough in his own time, is virtually unknown today.