Free banking theory approach to money

iiiABSTRACTIn economics literature, arguments about money supply have been discussed in recentyears. Laissez-faire approach to money and free banking is one of these arguments.Laissez faire approach to money and free banking has been supported by some economistsand rejected by the other ones. The most important advocate of free banking theory is Hayek.His most important superiority to his collegeous is that he advocated his views in the yearsliberalism was not so popular (1930s). Although, there have been a lot of rejections toHayek?s views, his views offer valuable theoric informations and form a sound ground for thesolutions to economic problems.This study examines free banking theory approach to money. In this context, economicsliterature is to be researched and especially Hayek?s views are to be explained. The validity offree banking theory is to be discussed, drawing attention Hayek?s views, in this study.Consequently, this study shows how important Hayek?s views and its modern implications,including electronic money, are in economics.