It is sometimes said that commercial banks in our modern monetary system create money “from thin air”. While there is truth in this metaphorical claim, the metaphor can also be seriously misleading, and leads some to attribute powers to commercial banks that are actually retained by the government alone under our system. It is worth trying to get clear about all this.New Economic Perspectives
Do Banks Create Money from Thin Air?
Dan Kervick
2 comments:
Way to go wading past the metaphors here Dan... (sometimes we have to "get real"...)
rsp,
PS loved the Hanna-Barbera cartoon motif in your hypotheticals! ;)
PS loved the Hanna-Barbera cartoon motif in your hypotheticals! ;)
We're showing our age Matt :)
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