Unanswered Quibbles with Fractional Reserve Free Banking

posted by
July 17, 2011
Libertarian Papers
by Philipp Bagus & David Howden  
Posted in Commentary

"In this article we reply to George Selgin’s counterarguments to our article 'Fractional Reserve Free Banking: Some Quibbles.' Selgin regards holding cash as saving while we focus on the real savings necessary to maintain investment projects. Real savings are unconsumed real income. Variations in real savings are not necessarily equal to variations in cash holdings. We show that a coordinated credit expansion in a fractional reserve free banking (FRFB) system is possible and that precautionary reserves consequently do not pose a necessary limit." [abstract -- full paper available as PDF or MS Word download] (07/16/11)


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