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Rozeff on free banking: a critique

Rozeff on free banking: a critique PurposeThe purpose of this paper is to correct Rozeff (2010). He contends that fractional-reserve banking is legitimate and efficacious. The authors demonstrate that it is not.Design/methodology/approachThe design of this paper is to quote widely from Rozeff (2010) and then to expose his errors of analysis.FindingsThe authors demonstrate that fractional-reserve banking is neither legitimate nor efficacious.Originality/valueMoney is the lifeblood of the economy. If so, then banking is the marrow of the economy, since it is from that sector that money arises in the first place. It is crucially important, then, that the monetary system be based on sound principles. Fractional-reserve banking is a violation of these sound principles. Therefore, it is valuable to demonstrate that this is indeed the case. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic and Administrative Sciences Emerald Publishing

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1026-4116
DOI
10.1108/JEAS-07-2017-0067
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to correct Rozeff (2010). He contends that fractional-reserve banking is legitimate and efficacious. The authors demonstrate that it is not.Design/methodology/approachThe design of this paper is to quote widely from Rozeff (2010) and then to expose his errors of analysis.FindingsThe authors demonstrate that fractional-reserve banking is neither legitimate nor efficacious.Originality/valueMoney is the lifeblood of the economy. If so, then banking is the marrow of the economy, since it is from that sector that money arises in the first place. It is crucially important, then, that the monetary system be based on sound principles. Fractional-reserve banking is a violation of these sound principles. Therefore, it is valuable to demonstrate that this is indeed the case.

Journal

Journal of Economic and Administrative SciencesEmerald Publishing

Published: Jul 2, 2018

References