In this article we develop new tools to survey the development of lending-of-lastresort operations in the mid-nineteenth century. One finding is that free lending and extensive liquidity support against good collateral developed gradually after 1847, and was already a fact of life before Bagehot published Lombard Street. Another is that the extension of the Bank of England's lender-of-last-resort function went along with a reduction of its exposure to default risks, in contrast with accounts that have associated lending of last resort with moral hazard. Finally, we provide a new interpretation of the 'high rates' advocated by Bagehot. We suggest they were meant to prevent banks from free-riding on the safety offered by the central bank, and were aimed at forcing them to keep lending during crises so as to maintain a critical degree of liquidity in the money market.T he recent sub-prime crisis, described by some observers as a run on banks that manifested itself as a liquidity crisis, has aroused renewed interest in Bagehot's famous rules, which are encapsulated in a set of principles for successful lending-of-last-resort operations. 2 These principles were described in Walter Bagehot's Lombard Street, published in 1873, but Bagehot's ideas emerged gradually over the 1860s in a succession of papers published in the aftermath of the so-called Overend-Gurney crisis of 1866. Bagehot, then editor of the Economist, wrote at a time when recurrent crises in the money market threatened the British economy with financial collapse and dislocation. The problems of the nineteenth-century money market were not unlike those of today.This market was a place where banks traded short-term debt obligations, then known as 'bills' and originating in either commercial or financial transactions. Banks sold their certification of the bills for a fee, and this made them liable for payment.Vast amounts of such securities were exchanged during normal times, but the market froze during panics. A triggering

In this paper the effects of a changing age distribution on aggregate consumption are analysed. This is done by estimating a Norwegian consumption function which controls for age structure effects. The model is estimated on quarterly time series data from 1968(3) to 1998(4). The results show that changes in the age composition affect aggregate consumption significantly, giving support to the predictions of the Life Cycle Hypothesis that young adults and old persons have a higher average propensity to consume than the middle-aged. The consumption model encompasses a model which does not control for age composition effects.

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The monetary policy trilemma maintains that financial openness, fixed exchange rates, and monetary independence cannot coexist. Yet, in the 1850s, Belgium violated this prediction. Through a study of nineteenth-century monetary policy implementation, this article investigates the reasons for such success. This was mainly built on the stabilisation of central bank liquidity, not of exchange rates as assumed by the target-zone literature. Other ingredients included: the role of circulating bullion as a buffer for central bank reserves, the banking system's structural liquidity deficit towards the central bank, and the central bank's size relative to the money market.