A Pre-history of the Federal Reserve

  • David Howden


While economists have generally quite favorable views of market-oriented solutions to the provisions of goods and services, there is one common exception: money (Rothbard 1991: 2; Huerta de Soto 2012: xxx). This seeming paradox brings with it three unfortunate results. First, since the supply of money is assumed to be produced optimally by a central bank, monetary economics commonly treats it as an exogenous variable. Second, and as a consequence of this point, is that any change to central bank controlled monetary policy is seen as a panacea for economic disequilibria. Finally, since the central bank is in control of the panacea it is raised to the lofty position of “doctor” of the economy, a highly respected and necessary role to correct for imbalances caused by entrepreneurs and investors.


Central Bank Federal Reserve Money Supply Banking Sector European Central Bank 
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Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  1. 1.St. Louis UniversityMadridSpain

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