The Central Banking System Paradox

• Autorzy: Víctor I. Espinosa , Miguel Angel Alonso-Neira , Jesús Huerta de Soto
• Języki publikacji: EN

Abstrakty

EN

The conventions of monetary theory assume the central banking system (CBS) as the starting point for achieving the stability and efficiency of the financial system. This paper stresses the stability-efficiency thesis based on the Austrian business cycle theory (ABCT). It argues that the stability-efficiency thesis under CBS poses a paradox for two main reasons. First, central banks' interest rate handling causes business cycles, yielding the intertemporal discoordination of the money and goods markets. Second, a central bank's lender-of-last-resort role is an incentive to call for further interest rate handling, making the chance of smooth business cycles difficult or impossible. This paradox is empirically analyzed and discussed through the True Money Supply (TMS) performance in the United States's business cycle phases between 1975 and 2022. Consistent with the ABCT, the research results unlock the paradox by showing that CBS causes business cycles. Some policy implications are outlined for further research and revision of monetary theory. (original abstract)

Słowa kluczowe

EN

Central banks; Interest rate; Inflation; Business cycles; Ethics; Banks obligatory reserves

PL

Banki centralne; Stopa procentowa; Inflacja; Cykl koniunkturalny; Etyka; Rezerwy obowiązkowe banków

• Czasopismo: Economics & Sociology
• Rocznik: 2023
• Tom: 16
• Numer: nr 4
• Strony: 56--72

Twórcy

autor

Víctor I. Espinosa

• Universidad Autónoma de Chile, Universidad del Desarrollo, Santiago, Chile

autor

Miguel Angel Alonso-Neira

• University Rey Juan Carlos, Spain

autor

Jesús Huerta de Soto

• University Rey Juan Carlos, Spain

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Identyfikatory

DOI

10.14254/2071-789X.2023/16-4/3