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Adam Smith et la banque libre

Author

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  • Laurent Le Maux

Abstract

Smith is the forerunner of the free banking theory. Smith develop the law of reflux which asserts that private banks cannot over-issue because the convertibility rule and the market mechanism induce banks to supply just the amount of money that public want to hold. The real bills doctrine of Adam Smith has been misinterpreted and just propose a solution to the law of reflux. Smith is a forerunner too of information asymmetry theory. He shows that banks are confronted with information asymmetry when they discount doubtful bill, and it is in their interest to control actively the quality of their claims.

Suggested Citation

  • Laurent Le Maux, 2002. "Adam Smith et la banque libre," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 45(1), pages 3-36.
  • Handle: RePEc:bxr:bxrceb:y:2002:v:45:i:1:p:3-36
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    More about this item

    Keywords

    Free Banking; Law of Reflux; Real Bills Doctrine; Information Asymmetry; La Banque Libre; Loi du Reflux; Doctrine des Effets de Commerce Réels; Asymétrie de l'Information;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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