IDEAS home Printed from https://ideas.repec.org/a/kap/revaec/v33y2020i1d10.1007_s11138-019-00436-1.html
   My bibliography  Save this article

The super-alertness of central banks

Author

Listed:
  • Nicolás Cachanosky

    (Metropolitan State University of Denver)

  • Alexander W. Salter

    (Texas Tech University)

Abstract

This paper applies Kirzner’s theory of entrepreneurial alertness to central banking. As opposed to entrepreneurs operating within the market, central banks can operate outside the market by defining its structure and regulations. We label as “super-alertness” the particular type of Kirznerian alertness that central banks are required to have to successfully achieve stable monetary equilibrium.

Suggested Citation

  • Nicolás Cachanosky & Alexander W. Salter, 2020. "The super-alertness of central banks," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(1), pages 187-200, March.
    • Handle: RePEc:kap:revaec:v:33:y:2020:i:1:d:10.1007_s11138-019-00436-1
    DOI: 10.1007/s11138-019-00436-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11138-019-00436-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11138-019-00436-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hendrickson, Joshua R., 2017. "Interest on reserves, settlement, and the effectiveness of monetary policy," Journal of Macroeconomics, Elsevier, vol. 54(PB), pages 208-216.
    2. Milton Friedman, 1947. "Lerner on the Economics of Control," Journal of Political Economy, University of Chicago Press, vol. 55, pages 405-405.
    3. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
    4. Andreas Hoffmann, 2014. "Zero-interest Rate Policy and Unintended Consequences in Emerging Markets," The World Economy, Wiley Blackwell, vol. 37(10), pages 1367-1387, October.
    5. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 24(Win), pages 14-23.
    6. Roger Koppl, 2002. "Big Players and the Economic Theory of Expectations," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-62924-0, December.
    7. Andreas Fuster & David Laibson & Brock Mendel, 2010. "Natural Expectations and Macroeconomic Fluctuations," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 67-84, Fall.
    8. Brunner, Karl & Meltzer, Allan H., 1976. "The Phillips curve," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 1-18, January.
    9. Ben S. Bernanke & Michael Woodford, 1997. "Inflation forecasts and monetary policy," Proceedings, Federal Reserve Bank of Cleveland, pages 653-686.
    10. Salter, Alexander William & Young, Andrew T., 2018. "A theory of self-enforcing monetary constitutions with reference to the Suffolk System, 1825–1858," Journal of Economic Behavior & Organization, Elsevier, vol. 156(C), pages 13-22.
    11. Cachanosky Nicolás, 2017. "Austrian Economics, Market Process, and the EVA® Framework," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 12(s1), pages 1-9, July.
    12. Alexander William Salter, 2013. "Not all NGDP Is Created Equal: A Critique of Market Monetarism," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 29(Fall 2013), pages 41-52.
    13. William J. Luther, 2013. "Friedman Versus Hayek on Private Outside Monies: New Evidence for the Debate," Economic Affairs, Wiley Blackwell, vol. 33(1), pages 127-135, February.
    14. Ben S. Bernanke, 2015. "The Federal Reserve and the Financial Crisis," Economics Books, Princeton University Press, edition 1, number 9928-2.
    15. Dutkowsky, Donald H. & VanHoose, David D., 2017. "Interest on reserves, regime shifts, and bank behavior," Journal of Economics and Business, Elsevier, vol. 91(C), pages 1-15.
    16. Alexander W. Salter & Daniel J. Smith, 2017. "What You Don'T Know Can Hurt You: Knowledge Problems In Monetary Policy," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 505-517, July.
    17. Nicolás Cachanosky & Alexander W. Salter, 2017. "The view from Vienna: An analysis of the renewed interest in the Mises-Hayek theory of the business cycle," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(2), pages 169-192, June.
    18. Selgin, George & Lastrapes, William D. & White, Lawrence H., 2012. "Has the Fed been a failure?," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 569-596.
    19. Thomas L. Hogan & Linh Le & Alexander William Salter, 2015. "Ben Bernanke and Bagehot's Rules," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(2-3), pages 333-348, March.
    20. Sumner, Scott, 1989. "Using Futures Instrument Prices to Target Nominal Income," Bulletin of Economic Research, Wiley Blackwell, vol. 41(2), pages 157-162, April.
    21. Selgin, George & Beckworth, David & Bahadir, Berrak, 2015. "The productivity gap: Monetary policy, the subprime boom, and the post-2001 productivity surge," Journal of Policy Modeling, Elsevier, vol. 37(2), pages 189-207.
    22. Carl E. Walsh, 2009. "Inflation Targeting: What Have We Learned?," International Finance, Wiley Blackwell, vol. 12(2), pages 195-233, August.
    23. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    24. Dowd, Kevin, 1992. "Models of Banking Instability: A Partial Review of the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 6(2), pages 107-132.
    25. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    26. Selgin, George A. & White, Lawrence H., 1994. "Monetary Reform and the Redemption of National Bank Notes, 1863–1913," Business History Review, Cambridge University Press, vol. 68(2), pages 205-243, July.
    27. Murray N. Rothbard, 1960. "The Politics of Political Economists: Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 74(4), pages 659-665.
    28. Boettke, Peter & Coyne, Christopher (ed.), 2015. "The Oxford Handbook of Austrian Economics," OUP Catalogue, Oxford University Press, number 9780199811762, Decembrie.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicolás Cachanosky, 2021. "Microfoundations and macroeconomics: 20 years," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(2), pages 279-288, June.
    2. Nicolás Cachanosky, 0. "Microfoundations and macroeconomics: 20 years," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 0, pages 1-10.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salter, Alexander William & Tarko, Vlad, 2017. "Polycentric banking and macroeconomic stability," Business and Politics, Cambridge University Press, vol. 19(2), pages 365-395, June.
    2. Alexander Salter, 2014. "Is there a self-enforcing monetary constitution?," Constitutional Political Economy, Springer, vol. 25(3), pages 280-300, September.
    3. Nicolás Cachanosky, 0. "Microfoundations and macroeconomics: 20 years," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 0, pages 1-10.
    4. Nicolás Cachanosky, 2021. "Microfoundations and macroeconomics: 20 years," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(2), pages 279-288, June.
    5. Peter J. Boettke & Alexander W. Salter & Daniel J. Smith, 2018. "Money as meta-rule: Buchanan’s constitutional economics as a foundation for monetary stability," Public Choice, Springer, vol. 176(3), pages 529-555, September.
    6. Salter, Alexander W. & Smith, Daniel J., 2019. "Political economists or political economists? The role of political environments in the formation of fed policy under burns, Greenspan, and Bernanke," The Quarterly Review of Economics and Finance, Elsevier, vol. 71(C), pages 1-13.
    7. George Selgin, 2014. "Operation Twist-the-Truth: How the Federal Reserve Misrepresents Its History and Performance," Cato Journal, Cato Journal, Cato Institute, vol. 34(2), pages 229-263, Spring/Su.
    8. Salter, Alexander & Tarko, Vlad, 2017. "Governing the Financial System: A Theory of Financial Resilience," Working Papers 06954, George Mason University, Mercatus Center.
    9. Selgin, George & Lastrapes, William D. & White, Lawrence H., 2012. "Has the Fed been a failure?," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 569-596.
    10. Thomas L. Hogan, Daniel J. Smith, Robin Aguiar-Hicks, 2018. "Central Banking without Romance," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 15(2), pages 293-314, December.
    11. Cachanosky, Nicolás & Ferrelli Mazza, Federico Julián, 2021. "Why did inflation targeting fail in Argentina?," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 102-116.
    12. Alexander W. Salter & Daniel J. Smith, 2017. "What You Don'T Know Can Hurt You: Knowledge Problems In Monetary Policy," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 505-517, July.
    13. Nicolás Cachanosky & Alexander W. Salter, 2017. "The view from Vienna: An analysis of the renewed interest in the Mises-Hayek theory of the business cycle," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(2), pages 169-192, June.
    14. repec:zbw:bofrdp:2007_032 is not listed on IDEAS
    15. Belke, Ansgar, 2000. "Partisan Political Business Cycles in the German Labour Market? Empirical Tests in the Light of the Lucas-Critique," Public Choice, Springer, vol. 104(3-4), pages 225-283, September.
    16. Sumner, Scott, 2015. "Nominal GDP futures targeting," Journal of Financial Stability, Elsevier, vol. 17(C), pages 65-75.
    17. Matthias Efing, 2012. "Bank Capital Regulation with an Opportunistic Rating Agency," Swiss Finance Institute Research Paper Series 12-19, Swiss Finance Institute.
    18. Mark Hallerberg & Lúcio Vinhas de Souza & William Roberts Clark, 2002. "Political Business Cycles in EU Accession Countries," European Union Politics, , vol. 3(2), pages 231-250, June.
    19. Bruno Frey & Alois Stutzer, 2010. "Happiness and public choice," Public Choice, Springer, vol. 144(3), pages 557-573, September.
    20. Hogan, Thomas L., 2021. "Bank lending and interest on excess reserves: An empirical investigation," Journal of Macroeconomics, Elsevier, vol. 69(C).
    21. George W. Evans & Seppo Honkapohja, 2009. "Expectations, Learning and Monetary Policy: An Overview of Recent Research," Central Banking, Analysis, and Economic Policies Book Series, in: Klaus Schmidt-Hebbel & Carl E. Walsh & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.),Monetary Policy under Uncertainty and Learning, edition 1, volume 13, chapter 2, pages 027-076, Central Bank of Chile.

    More about this item

    Keywords

    Free banking; Central banking; Alertness; Super-alertness; Monetary equilibrium;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revaec:v:33:y:2020:i:1:d:10.1007_s11138-019-00436-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.