Restrictive Banking Policies Lead to Low Growth


This article appeared in South China Morning Post on March 21, 2015.

We are still in the grip of the Great Recession. Economic growth remains anaemic and below its trend rate in most parts of the world. And what’s more, this state of subdued economic activity has been with us for more than seven years.

True to form, central bankers have steadfastly denied any culpability for creating the bubbles that so spectacularly burst during the panic of 2008-09. What’s more, they have repeatedly told us that they have saved us from a Great Depression.

To understand why, we need look no further than Milton Friedman.

In a 1975 book of essays in honour of Friedman, Gordon Tullock wrote: “On several occasions in my hearing (I don’t know whether it is in his writing or not but I have heard him say this a number of times) Milton Friedman has pointed out that one of the basic reasons for the good press the Federal Reserve Board has had for many years has been that the Federal Reserve Board is the source of 98 per cent of all writing on the Federal Reserve Board.”…

Restrictive Banking Policies Lead to Low Growth

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