THE BANKING QUESTION IN MID-NINETEENTH-CENTURY SPAIN: THE CASE OF LUIS MARÍA PASTOR

Luis María Pastor (1804–1872) was the most important monetary economist in mid-nineteenth-century Spain. By examining his ideas and their evolution, this paper sheds new light on how the banking question was addressed in the country. Traditionally, Pastor has been associated with the British Free Banking School. However, we argue that his main intellectual sources were French liberal economists. This paper also provides evidence that domestic economic realities can shape an author’s economic thought. Pastor nuanced the Free Banking School’s tenets by emphasizing liquidity problems as the main trigger of economic crises. We attribute this originality to the influence on him of the Spanish financial crisis of the mid-1860s.