Central bank monopolies are rife with informational and incentive problems that make it unlikely for them to prevent economic bubbles and recessions from ever occurring. In contrast, a monetary system with many centers of authority and control—something akin to historical free banking—is inherently less prone to such problems and therefore is more capable of ensuring prolonged macroeconomic stability.

Alexander William Salter is a Research Fellow at the Independent Institute and Associate Professor of Economics in the Rawls College of Business at Texas Tech University.
Banking and FinanceBusiness and EntrepreneurshipEconomic PolicyEconomy
Other Independent Review articles by Alexander William Salter
Summer 2020 Ideologies, Institutions, and Interests: Why Economic Ideas Don’t Compete on a Level Playing Field
Fall 2018 Space Capitalism: How Humans Will Colonize Planets, Moons, and Asteroids
Spring 2018 The Political Economy of Public Debt: Three Centuries of Theory and Evidence
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