Central Banking Quite Harmful for Emerging Countries: The Case for (first) Dollarization and (then) Free Banking
menghu.substack.com
A sound banking system is a necessary component of economic prosperity. The mainstream view on banking is that a central bank must prevail. In the case of emerging countries however, an alternative market-friendly monetary system involving a fixed exchange rate (sometimes coined dollarization) is by far a preferable outcome. This article will first describe the free banking era in South Africa prior to World War I, then the dollarization experiences in South America, and finally describe the advantage of a free banking system over a central banking system.
Central Banking Quite Harmful for Emerging Countries: The Case for (first) Dollarization and (then) Free Banking
Central Banking Quite Harmful for Emerging…
Central Banking Quite Harmful for Emerging Countries: The Case for (first) Dollarization and (then) Free Banking
A sound banking system is a necessary component of economic prosperity. The mainstream view on banking is that a central bank must prevail. In the case of emerging countries however, an alternative market-friendly monetary system involving a fixed exchange rate (sometimes coined dollarization) is by far a preferable outcome. This article will first describe the free banking era in South Africa prior to World War I, then the dollarization experiences in South America, and finally describe the advantage of a free banking system over a central banking system.