Currency School versus Banking School: an ongoing confrontation

Charles Goodhart and Meinhard Jensen

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The Chicago Plan and Laina’s full-reserve banking proposal are themselves extensions of Ricardo’s earlier proposal for separating money creation from bank intermediation, as incorporated in the 1844 Bank Act. This was the key Currency School position, which was opposed then and subsequently by the Banking School. In this Commentary we outline the criticisms which Banking School supporters have made over the centuries of the Currency School, and indicate what alternative principles the Banking School has proposed.

Keywords: Currency School and Banking School; rules vs discretion; money vs quasi-money; evolutionary vs static banking structure. (search for similar items in EconPapers)
JEL-codes: F3 G3 N0 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-his, nep-mon and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published in Economic Thought, 2015, 4(2), pp. 20-31. ISSN: 2055-6314

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:64068

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