David Hume opposes banks and favors hoarding. The only bank he reluctantly approves of is a public, 100% reserve bank. Other banks increase money supply and prices, hindering exports and economic growth. For Hume, a 100% reserve public bank would lead to ‘‘the destruction of paper-credit’’ ( 1985, p. 285), fostering economic growth instead by preventing inflation. Additionally, a 100% reserve bank hoards a large quantity of gold and silver, which is available in case of national emergency.
Document Object Identifier (DOI)
Paganelli, M. P. (2014). David Hume on Banking and Hoarding. Southern Economic Journal, 80(4), 968-980.
Southern Economic Journal