Why Do Central Banks Exist?
25 Pages Posted: 7 Nov 2009
Date Written: November 5, 2009
This article describes in some detail the properties of free market money and banking so as to contrast state-controlled central bank money and banking. It examines seven steps that government takes to replace the free market with central banking as it creates a banking system cartel. A number of myths surrounding central banking are spelled out and criticized, leading to an answer to the question of why central banks really exist. The article strongly opposes the conventional wisdom surrounding both central banks and the role of economists in government actions.
Keywords: Free market banking, central banking, medium of account, money, gold
JEL Classification: E42, E58, G21, H11
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