Government-Cheerleading Bias in Money and Banking Textbooks

ECON JOURNAL WATCH 17(1) March 2020: 98–151

54 Pages Posted: 18 May 2020

See all articles by Nicholas Adam Curott

Nicholas Adam Curott

Ball State University - Department of Economics

Tyler Watts

East Texas Baptist University

Date Written: March 31, 2020

Abstract

This paper investigates the six textbooks most commonly adopted in U.S. undergraduate money and banking courses for how they describe the influences that commercial banks and central banks have on macroeconomic stability. We examine seven topics: (1) the inherent stability of banks, bank runs, and panics; (2) The historical origins of central banks created before the Fed; (3) the fragility of U.S. banks during the National Banking Era and the origins of the Federal Reserve System; (4) U.S. bank panics during the Great Depression; (5) deposit insurance; (6) monetary policy and the Great Recession of 2008–2009 ; and (7) the performance of the U.S. economy before and after the Federal Reserve Act. For each of these topics we review the academic literature and compare this literature to the information presented in college textbooks. In each case we find the textbook presentations are incomplete in a way that systematically favors one view in the literature over another, making a government-cheerleading bias.tract Body]

Keywords: money and banking, textbooks, bank runs, contagion, bank panic, deposit insurance, National Banking Era, Great Depression, Financial Crisis of 2008

JEL Classification: A2, E5, N1, N2

Suggested Citation

Curott, Nicholas Adam and Watts, Tyler, Government-Cheerleading Bias in Money and Banking Textbooks (March 31, 2020). ECON JOURNAL WATCH 17(1) March 2020: 98–151, Available at SSRN: https://ssrn.com/abstract=3581798

Nicholas Adam Curott (Contact Author)

Ball State University - Department of Economics ( email )

Muncie, IN 47306-0340
United States

Tyler Watts

East Texas Baptist University ( email )

One Tiger Dr.
Marshall, TX 75670
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
18
Abstract Views
299
PlumX Metrics