(This one’s especially for GPO.) In the aftermath of the U.S. banking crises of the 1930s, it became common for American economists to speak of the “inherent” instability of fractional-reserve banking and of the “perverse elasticity” of money supply in fractional-reserve banking systems. What the economists in…
Free banking as a policy ideal is the result of applying the norms of classical liberalism to money and banking. Classical liberalism upholds individual liberty and private property rights, including freedom of contract, under the rule of law. It opposes rule by unconstrained authorities. Skipping over ancient…
At Marginal Revolution, Tyler Cowen has a post on the New Monetary Economics. He says, If you’re looking for a definition of the NME, I would say it is the study of unusual monetary arrangements involving either explicit prices for monetary media of exchange (i.e., separating money’s…
Over at Cafe Hayek, some comments made concerning my last Free Banking post suggest that Murray Rothbard, though opposed in principle to fractional-reserve banking, did not wish to see it prohibited. That's not really correct. As I pointed out there: "Actually in arguing that FR banking was…
Now that the blog is well launched and other contributors are writing posts, I generally will not directly reply to comments. I may reply indirectly in later posts, but I have enough else to do in my life that responding to blog comments is not my top…