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THE ISSUE OF FREE BANKING DURING THE BULLIONIST CONTROVERSY

Published online by Cambridge University Press:  19 March 2019

Juan Ramón Rallo Open the ORCID record for Juan Ramón Rallo [Opens in a new window]
Juan Ramón Rallo*
Affiliation:
Economics Department in Universidad Francisco Marroquín, Spain
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Abstract

The discussions of the Bullionist Controversy were closely related to the effects of inconvertibility on prices and exchange rates. However, during their discussions, economists had a need to address other important questions such as the convenience of free banking. In this paper, we will study the perspective of the different schools involved in the debate on this issue: we will show that their positions were wholly coherent with their underlying assumptions on the nature of monetary assets. The economists who viewed gold and banknotes as perfect substitutes, such as the radical bullionists, tended to favor a ban on free banking. On the contrary, the economists who viewed banknotes and gold as imperfect substitutes, such as the moderate bullionists and antibullionists, were inclined to favor free banking.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 41 , Issue 1 , March 2019 , pp. 99 - 115
Copyright
Copyright © The History of Economics Society 2019 

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