The Super-Alertness of Central Banks

Abstract

This paper applies Kirzner’s theory of entrepreneurial alertness to central banking. As opposed to entrepreneurs operating within the market, central banks can operate outside the market by defining its structure and regulations. We label as “super-alertness” the particular type of Kirznerian alertness that central banks are required to have to successfully achieve stable monetary equilibrium.

Keywords: Free Banking, Central Banking, Alertness, Super-Alertness, Monetary Equilibrium

JEL Classification: B53, D80, E50