An Appeal for Better Scholarly Discourse: How Bagus and Howden Have it Wrong on Free Banking
13 Pages Posted: 1 May 2011
Date Written: April 30, 2011
In their recent article in the Quarterly Journal of Austrian Economics, Bagus and Howden (2010) present “quibbles” with fractional reserve free banking. Or specifically, what they call “unaddressed issues” in this system, with a particular emphasis on Selgin (1988). We deem their arguments to be more substantial than “quibbles” and are part of a longstanding debate about fundamental aspects of monetary theory. We respond to their objections and attempt to specify how debate between the two sides might proceed more productively.
Keywords: business cycles, central banking, free banking, monetary equilibrium
JEL Classification: B53, E31, E32, E41, E42, E51, G21
Suggested Citation: Suggested Citation