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David Hume on Banking and Hoarding

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  • Maria Pia Paganelli

Abstract

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” ([1752] 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.

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  • Maria Pia Paganelli, 2014. "David Hume on Banking and Hoarding," Southern Economic Journal, John Wiley & Sons, vol. 80(4), pages 968-980, April.
    • Handle: RePEc:wly:soecon:v:80:y:2014:i:4:p:968-980
    DOI: 10.4284/0038-4038-2013.163
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    References listed on IDEAS

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