The present financial crisis shows how central banks can fuel the financial booms that make severe busts possible. Unfortunately, theoretical discussions of central banking badly neglect its role in fostering financial instability, in part because they ignore its history and political origins.
Read the Full Article
(PDF, 12 pages)
|Other Independent Review articles by George A. Selgin|
|Fall 2013||The Financial Crisis and the Free Market Solution|
|Summer 2011||They Stumble Who Run Fast: Roubini and Mihms Crisis Economics|
|Summer 2000||Should We Let Banks Create Money?|