The Review of Austrian Economics

, Volume 25, Issue 2, pp 159–171 | Cite as

Still unanswered quibbles with fractional reserve free banking

  • Philipp Bagus
  • David HowdenEmail author


Anthony Evans and Steven Horwitz readily admit that their own understanding of monetary theory is imperfect, and do not even “attempt a rebuttal of [our] claims.” George Selgin accepts that some of the arguments we put forward in Bagus and Howden (2010) make for “interesting theory”. He fails to rebuff our claim that precautionary reserves are unable to constrain credit creation in a fractional reserve free banking system. While calling for us to provide historical evidence to validate the quibbles we put forward, Selgin himself overstates the evidence. He also claims that we have distorted what he has written, and that we use incorrect monetary theory. These allegations are false.


Business cycles Central banking Free banking Monetary equilibrium 


B53 E32 E42 E51 G21 


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© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Department of Applied Economics IRey Juan Carlos UniversityMadridSpain
  2. 2.Department of Business and EconomicsSt. Louis University-Madrid CampusMadridSpain

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