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In Defense of Fiduciary Media—A Comment; or, What's Wrong with "Clown" or Play Money?

  • The Quarterly Journal of Austrian Economics

Tags Monetary Theory

07/30/2014William Barnett IIWalter Block
 

Volume 8, No. 2 (Summer 2005)

 

Selgin and White commence their defense of monetary systems with fractional-reserve banking, provided they are based on gold specie money. They argue that such systems are both ethically and economically defensible. With respect to the economics of the matter, they address several issues. We consider them in the following order: instability; resource costs savings;feasibility; and, mismatching of maturities. We conclude with a discussion of the possible conflation of time and demand deposits. If Selgin and White are correct that fiduciary media could exist in an otherwise free market, we would have truly reached the promised land.

Authors:

Contact William Barnett II

Bill Barnett is professor of economics at Loyola University in New Orleans.

Contact Walter Block

Walter Block is the Harold E. Wirth Eminent Scholar Endowed Chair in Economics at Loyola University, senior fellow of the Mises Institute, and regular columnist for LewRockwell.com.

Click here to see an extensive online compendium of Dr. Block's publications.

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Cite This Article

Barnett, William II and Walter Block. "In Defense of Fiduciary Media—A Comment; or, What's Wrong with "Clown" or Play Money?." The Quarterly Journal of Austrian Economics 8, No. 2 (Summer 2005): 55–69.

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