This is a new paper with Alexander Salter (Free Market Institute at Texas Tech University) originally prepared for a conference co-organized between The Wirth Institute for Austrian and Central European Studies (University of Alberta) and the Mercatus Center (George Mason University).
This paper contributes to the Austrian literature. In particular, it applies Kirzner’s entrepreneurial alertness to the realm of policy-making and Koppl’s Big Players (such as a central bank).
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.