The Review of Austrian Economics

, Volume 25, Issue 2, pp 149–157

On not doing due diligence: Bagus and Howden on free banking


DOI: 10.1007/s11138-011-0155-3

Cite this article as:
Evans, A.J. & Horwitz, S. Rev Austrian Econ (2012) 25: 149. doi:10.1007/s11138-011-0155-3


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.


Business cycles Central banking Free banking Monetary equilibrium 

JEL classification

B53 E31 E32 E41 E42 E51 G21 

Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.ESCP EuropeLondonUK
  2. 2.St. Lawrence UniversityCantonUSA

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