Despite its title, Philipp Bagus and David Howden's critique of The Theory of Free Banking does more than merely "quibble" with that book's arguments: their criticisms of those arguments are such as to suggest that the very foundation upon which my defense of free banking rests is deeply flawed....

Modern accounts of the origins of fractional-reserve banking, in economics textbooks and elsewhere, often assert that London goldsmiths came up with the idea around the middle of the 17th century, and first implemented it by clandestinely lending coin that they were supposed to keep locked away...

In Lombard Street Walter Bagehot offered some second-best suggestions, informed by the crisis of 1866, for reforming the Bank of England's conduct during financial crises. Here I respond to the crisis of 2008 by proposing changes, in the spirit of Bagehot's own, to the Federal Reserve's...

The “money question” — which is to say, the question concerning the proper meaning of a “standard” U.S. dollar — was hotly contested throughout most of U.S. history, and partly for this reason a gold standard that was both official and functioning was in effect only for a period...

In light of the Great Financial Crisis, it should now be clear, in case it wasn't long ago, that central banks generally, and the Federal Reserve in particular, not only are unable to prevent financial and monetary catastrophes, but are unable to resist pursuing policies that inadvertently help...

In Lombard Street, Walter Bagehot (1873) offered his famous advice for reforming the Bank of England's lending policy. The financial crisis of 1866, and other factors, had convinced Bagehot that instead of curtailing credit to conserve the Bank's own liquidity in the face of an “internal...