''DID CENTRAL BANKS EVOLVE NATURALLY? A REVIEW ESSAY OF CHARLES GOODHART'S THE EVOLUTION OF CENTRAL BANKS''

from 1990 by kevin dowd....


"One of the most significant developments in monetary economics in the past few years has been the resurgence of the 'free banking' school which advocates the abolition of central banks and the deregulation of the monetary system. The free bankers argue that most of our recent monetary instability is caused, not by the defects of the particular central banking system within which we live, but by defects inherent in central banking itself, and they conclude that the only way to establish monetary stability is to abolish central banking altogether. One might have thought that such a radical position would have attracted more attention from the defenders of central banking, but they have made little systematic attempt to meet it. 


The one exception is Charles Goodhart, whose book The Evolution of Central Banks is the first major attempt since the controversy re-opened by a prominent supporter of central banking to meet this challenge, and this alone makes Professor Goodhart's book a major contribution to the literature. It also deserves attention because it sets out, not merely to provide a vigourous defence of central banking against its critics, but to go on the offensive and demolish the case for free banking".