The Theory of Private Money and the Problem of Positioning the Central Bank as Emission Body

Abstract

The topic of the article is acute due to different factors, on the one hand, it is the 120th anniversary of F. A. Hayek, the Nobel prize winner, who was awarded for a series of works dealing with the theory of private money and on the other hand, it is a controversial standing of the Central Bank within the frames of the current monetary system. Therefore, the research includes two interconnected sections: the theory of private money put forward by F. A. Hayek and the Central Bank as an emission body. The goal of the research is to analyze the theory of private money from the standpoint of the Russian school of economic thought and to show the groundless granting of the emission function to the Central Bank in today’s conditions. The article used methods of analysis and synthesis, deduction and induction, organic sequence and others. The author came to the conclusion that such foundation of cash emission as the Central Bank reputation is groundless and even exceeds the limits of science competence, as it is based on violation of the fundamental law of the material world development, i.e. the law of conversion of matter, energy. The bank reputation cannot be estimated by anything and at the same time it cannot be compared with the volume of cash emission. The status of the Central Bank as an emission body (a bank of banks) should be transformed.