credit creation Archives

$Fritz Machlup, fractional reserve banking, credit creation, bank credit, Alt-M Classics$

[Having drawn attention in my last post to Fritz Machlup's superb 1940 book, The Stock Market, Credit, and Capital Accumulation, it occurred to me that excerpts from that work concerning the circumstances in which an increase in the supply of "fiduciary" bank credit will not promote an…

Economic History, Free Banking, The Fed & Central Banks

Hayek on the Creation of Moral Hazard by Central Banks

Larry White/December 7, 2017June 19, 2022

Some years ago I published a paper on the banking theory and policy views of the important twentieth-century economist Friedrich A. Hayek, entitled “Why Didn't Hayek Favor Laissez Faire in Banking?”[1] Very recently, working on a new paper on Hayek’s changing views of the gold standard, I…