An academic paper by our intern, David Chávez Salazar, was published recently in the Spanish economics journal Procesos de Mercado. The topic is Colombia’s free banking period from 1865 to 1886. Here is a summary of the paper in English – find the complete paper in Spanish attached at the end:
A microeconomic review of the Colombian free banking period: 1865-1886
This paper offers an analysis of the episode of Free Banking that took place in Colombia between 1865 and 1886 from three elements: its historical antecedents, its development in each of the states that conformed the country at that time, and the episodes that led to this end. These aspects are addressed from an Austrian microeconomic perspective.
For the historical review, the historical-conjectural approach, proposed by Lawrence White and George Selgin was applied, which contemplates four stages of development: i. Emergence of a standardized commodity-money, ii. Emergence of incipient banking services, iii. Emergence of assignable and negotiable instruments that facilitate the exchange, and iv. Establishment of clearing agreements.
Free Banking was developed in a different way in each state, for that reason, an individual analysis is done. Despite its potential, Free Banking abruptly ended because of state intervention.
Find the complete paper here!