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- Title
AGAINST MONETARY DISEQILIBRIUM THEORY AND FRACTIONAL RESERVE FREE BANKING.
- Authors
Davidson, Laura
- Abstract
The theory of monetary disequilibrium, as espoused by Selgin (1988), White (1989), Horwitz (2000), and others, has been used to justify the issuance of fiduciary media under a system of fractional reserve "free" banking. The present paper examines this monetary disequilibrium theory and concludes that it contains numerous errors and logical fallacies. The foundational economic argument in favor of fractional reserve banking is invalid.
- Subjects
FREE banking; FRACTIONAL reserve banking; BUSINESS cycles; FINANCIAL institutions; BANKING industry; MONETARY systems
- Publication
Quarterly Journal of Austrian Economics, 2012, Vol 15, Issue 2, p195
- ISSN
1098-3708
- Publication type
Article