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George Selgin Profile picture
George Selgin
@GeorgeSelgin
Free-market monetary guy who has lucid moments. Director Emeritus of @CatoCMFA. I promise not to waste our time by saying things you expect me to say.
Liberal Patriot Profile picture Eileen Lyon Profile picture Marcos Bento Profile picture Viniecon Profile picture Carlo antonini Profile picture 16 subscribed
Jun 8 • 19 tweets • 4 min read
Thread: Bank Reserves and Laissez Faire.
In several exchanges now, @BobMurphyEcon has been questioning the claim that fractional reserve banking is consistent with monetary laissez faire. Here I explain why I find the whole discussion frustrating. Back in 1980, after reading Hayek's _Denationalization of Money_, I became intrigued b the question, "What would banking systems look like, and how would they work, under laissez faire?" I spent much of the next several years, mostly at NYU, seeking answers to those questions.
May 14 • 25 tweets • 5 min read
I've been thinking about this post by @StevenHailAus; and I think that "very, very" is misleading: my opinions about MMT are not so different, I think, from @dandolfo's. So a thread concerning precisely where I do and do not part company with MMTs. First, functional finance. I have read Lerner's famous article many times, and I find little to disagree with in it; on the contrary, I mostly agree with it. As a long-time proponent of NGDP targeting, why wouldn't I? Lerner here is very much one of us!
May 3 • 7 tweets • 1 min read
Yep, Berstein blows it. But there is a perfectly good answer to Kelton's question. (Short .) While the U.S. government could finance all its spending without borrowing or collecting taxes, those are two ways for it to get the public to abstain from acquiring real resources.
Mar 16 • 9 tweets • 2 min read
Pre-1914 NBER “recession” (contraction) data are badly flawed. Using Joseph Davis’s revised chronology, the 1st column value drops to just 79. And as I noted previously, months in contraction matter less than months of high unemployment.

So sorry, modern economists: no cigars! So let’s look at unemployment. Here’s the preFed record according J. R. Vernon; not great but not godawful, either: Image
Dec 28, 2023 • 11 tweets • 3 min read
Follow-up thread: Something many people, economists included, don’t appreciate is the extent to which the roots of historic U.S. financial instability lie in regulations that actually made banks weak snd failure-prone. I wrote an article long ago proposing and giving evidence for what I called a “legal restrictions” theory of financial crises. citeseerx.ist.psu.edu/document?repid…
Dec 25, 2023 • 7 tweets • 2 min read
This is idiotically reductionist. For starters, the gold standard wasn’t to blame for any pre-1914 U.S. crisis: had it been the problem, Canada, which shared the very sane gold dollar, would have experienced concurrent crises. It didn’t. 1/ Instead, stupid U.S. banking and currency laws made it uniquely crisis-prone during that era. This is common knowledge among U.S. economic and monetary historians. 2/
Nov 9, 2023 • 15 tweets • 3 min read
Quick thread on “monetary sovereignty.” It happens that I’m in Vilnius now, for the first time in 32 years. Back in 1990 and 1991 I was here putting together, with Kurt Schuler, the first- ever proposal for a post-Soviet eastern European currency board.
Aug 24, 2023 • 18 tweets • 3 min read
Well, I think I have a new record for most frustrating thread! But not being one to give up easily, I am going to try here to clarify some things about NGDP targeting and the ZLB. First, some preliminaries. Let's set aside the ZLB problem for now, and also abstract for the time being from Aggregate Supply (AS) innovations. Let the equilibrium real GDP growth rate be a steady 2%.
Aug 15, 2023 • 13 tweets • 3 min read
A dollarization thread. Although I'm no dollarization expert, I am sort of a expert one-step removed.
The story goes back to the summer of 1988, which I spent in Hong Kong, working with John Greenwood, the mastermind behind Hong Kong's dollar-based currency board. John was deciding who to have take my place as a research fellow there the following summer. He'd had been given a name--a good one, actually. I said, "No, John: I have a better suggestion. Fellow by the name of Kurt Schuler.
Jul 21, 2023 • 24 tweets • 5 min read
As #FedNow launches, a thread concerning my long-standing opposition to it. Image I learned that the Fed was contemplating setting up a retail real-time payment system back in late 2017. I had no prior convictions on the matter, but offered to look into it. My findings convinced me that there was no good reason for the Fed to pursue that idea.
Jun 27, 2023 • 6 tweets • 2 min read
Many of the claims made about free banking in this thread are false, starting with the claim below that under it the supply of money is "inelastic." I wrote a book in 1988 devoted to showing the opposite. In the small world of writings on free banking, it isn't exactly obscure! "Free banking had centralized governance within banks. In Zero...the community calls the shots. It’s like everyone gets a vote."
Perhaps a little reading-up on economists' understanding that "consumer sovereignty" prevails in competitive markets is in order here!
Jun 11, 2023 • 7 tweets • 1 min read
A thread: Some deliberately naive questions. Let’s say that all market participants decide not to accept paper currency, insisting instead on digital media, which could in principle be public or private. Central bankers are saying this obliges them to enter the retail digital money business. I’m not convinced.
Jun 9, 2023 • 19 tweets • 4 min read
Thread: I'm not sure Rothbard et al. can be blamed for the tendency of identifying with the Austrian-school (or with any other) to go hand-in-hand with a certain degree of insularity. I attended NYU, under an Austrian (Moorman) fellowship, before there was any such thing as a distinct set of "Rothbardian" Austrians. Some posts here have claimed that graduates of the NYU programs, as well as Austrian economists trained at UCLU or GMU, have perfectly open minds.
May 27, 2023 • 10 tweets • 2 min read
This warrants a full reply, so here goes. First, just about anything--food, automobiles, machinery, electronic equipment, houses, spectator sports--might be said to be "of common concern in a republic." It hardly follows from this alone that a case therefore exists for them to be provided by state authorities.
May 25, 2023 • 5 tweets • 2 min read
Any constant inflation rate goal is fundamentally flawed. Instead of considering a different inflation rate target, Fed officials should be considering the alternative of a nominal spending (NGDP) target. 1/ The main argument for a higher inflation rate target is that it reduces the risk that the Fed will run up against the interest rate zero lower bound. But a nominal spending target can also reduce that risk without raising the average inflation rate. cato.org/blog/reifschne…
May 4, 2023 • 31 tweets • 7 min read
Thread: Of course fiat standards have replaced commodity standards everywhere. But the story behind this outcome is not a simple tale of a superior technology supplanting an inferior one. As @lawrencehwhite1 and I have pointed out, another factor has has played a very large part in the development of monetary arrangements, namely, governments desire to monopolize and otherwise control money production for the _fiscal_ reasons, that is, to enhance their funding.
Apr 17, 2023 • 11 tweets • 3 min read
Mathew, I hope you will allow me to to to convince you that you are wrong. It will take a few tweets, so you must be patient; I'm starting with a quote tweet because it spares me numerous separate tweets, and because others may find the points I make of interest. First, I agree that the U.S. suffered numerous monetary "train wrecks" before the Fed was established. That was why it was established, after all. But it's also true that there have been many wrecks since, and that in other respects the Fed's record leaves much to be desired.
Mar 29, 2023 • 25 tweets • 6 min read
Thread. I see that my telling John that his claims have no foundation, and challenging him to supply some proof of them, has only encouraged him to repeat them. So now I will respond publicly. First, it bears noting how the critics of free banking are always placing the burden of proof on those who say it worked. @lawrencehwhite1 and Kevin Dowd and I have carried this burden with countless publications. But we should not always have to do so.
Mar 27, 2023 • 4 tweets • 2 min read
.@profstonge evidently knows less about banking jurisprudence than I know about string theory.
(And I don't know a darn thing about string theory.) In fact, "centuries of jurisprudence" have upheld the principle, dating from ancient times, that ownership of loose coin or other fungible money "deposited" with a bank, follows possession. alt-m.org/2017/09/06/the…
Mar 27, 2023 • 6 tweets • 2 min read
The claim that, because it has refused TNB and Custodia Master Accounts, the Fed won't let anyone form a narrow bank, is yet another myth badly in need of exploding. As I note in my reply below, neither refusal was due to Fed opposition to narrow banking _per se_. 1/ TNB was not granted a charter because it intended to be what the Fed calls a "Pass Though Investment Entity" (PTIE), which isn't a retail bank at all, but a device aimed to allowing non-bank financial institutions to tap into the Fed's IOR rate. alt-m.org/2018/09/10/the… 2/
Mar 22, 2023 • 12 tweets • 3 min read
Thread: This is hardly the first time that Christine Lagarde has made these arguments, treating CB currency monopolies as essential to "anchoring" monetary systems. But no matter how often she says it, it won't be true. Of course, any fiat regime needs a CB “anchor,” but all that means is that we must hope and pray that CB’s won’t issue oodles if the stuff! Whatever their other shortcomings, conmodity standards were more, not less, reliably “anchored.” Seehttps://www.jstor.org/stable/135820