Bank reserves: A dispute over words and classification
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A prominent philosophical/legal case for requiring 100% bank reserves employs a flawed style of argument. It involves essentialism (criticized by Karl Popper and Joseph Schumpeter), persuasive definitions (identified by Charles L. Stevenson), faulty classification, and the piling up of irrelevant facts and considerations.
KeywordsBank reserves “Essentialist” argument and “persuasive definitions”
JEL CodesG21 B53 A12 B40
I thank David Howden and Philipp Bagus for conversations and correspondence that were stimulating for me even though—or especially because—we disagree on key points. I also thank an anonymous referee for suggestions, particularly about the work of Henry Dunning Macleod.
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