[notahacker]

If you want full-reserve banking then (i) that's a different thing from free banking in practice and (ii) full reserve banking would result in interest rates wildly fluctuating because currency reserves are fixed in the short term, and the business sector's need to borrow for cashflow reasons varies. Wildly fluctuating short term interest rates deters longer term investments => slower growth

Also, since most full reserve proposals don't ban credit creation altogether (i.e. you can still issue and exchange IOU notes), but simply restrict credit creation and acceptance by institutions calling themselves banks, you end up with the economy relying on an unregulated shadow banking system even more prone to booms and busts to fulfil credit needs.