In their recent article in the Quarterly Journal of Austrian Economics, Bagus and Howden (2010) present “quibbles” with fractional-reserve free banking. Specifically, they raise 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 see them as 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.
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Citation (Chicago Style).
Evans, Anthony J. and Horwitz, Steven. "On Not Doing Due Diligence: Bagus and Howden On Free Banking," The Review of Austrian Economics, Vol. 25, No. 2, (2012): 149-157.