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Is there an example of a successful economy that ran without a central bank?
by guelo 12y ago
Is there an example of a successful economy that ran without a central bank?
- Mikeb85 12y agoWell, the main purpose of a central bank is to issue currency, so an economy without a central bank would need to use something else as currency (either a foreign currency, or some sort of commodity like gold or grain).
- antientropic 12y agoThe US had its own currency long before it had a central bank.
- ArkyBeagle 12y agoYou can look up the Free Scots Banks. Successful? Hard to say.
- mkempe 12y agoThe USA before 1913. See [1] for a detailed treatment of economies that thrived without central banking. [1] http://www.amazon.com/dp/B004VMUL6G http://www.amazon.com/dp/B004VMUL6G
- dap 12y agoWhat about an example of a major economy without a central bank that survived a major depression (say, the size of the Great Depression)? Or counterexamples? (I believe there are counter-examples -- nations with no central bank that took a worse beating than other nations that had a central bank during a major recession -- but I cannot remember them. Sorry.)
- mkempe 12y agoNobody can offer such an example, because the boom-bust (depression) cycle itself is caused by the interventions of central bankers.
- tedunangst 12y agoBank failures and panics were a regular feature of life in the US before 1913. Take your pick of the panic of 1873, 1884, 1890, 1893, 1896, 1907.... I wouldn't use the word "thrived".