A number of economists specializing in monetary and banking theory and policy have suggested that free and competitive private banking could be a viable option instead of the current system of central banking. Explain what these economists see as weaknesses of central banking. And discuss their theory of how private competitive banking possibly would be superior to the current central banking system. What do you consider to be the strengths and weaknesses of this argument?

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Weaknesses of Central Banking Economists critical of central banking often highlight several weaknesses in the current system 1 Lack of Market Discipline Central banks being monopolies may lack the di... View the full answer