Michael McLeay, Amar Radia and Ryland Thomas — Money in the modern economy: an introduction

Money in the modern economy: an introduction (538KB)By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s Monetary Analysis Directorate.

Money is essential to the workings of a modern economy, but its nature has varied substantially over time. This article provides an introduction to what money is today. Money today is a type of IOU, but one that is special because everyone in the economy trusts that it will be accepted by other people in exchange for goods and services. There are three main types of money: currency, bank deposits and central bank reserves. Each represents an IOU from one sector of the economy to another. Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves.

Bank of England
Quarterly Bulletin 2014 Q1
h/t  Geoffrey Gardiner

Dirk Ehnts — Money creation in the modern economy – the schism widens

Conventional economists are out of step with central bankers. Dirk Ehnts on the Bank of England's Michael McLeay, Amar Radia and Ryland Thomas recent papers, and a link to Éric Tymoigne's Modern Money Theory and Interrelations between the Treasury and the Central Bank.

econoblog 101
Money creation in the modern economy – the schism widens
Dirk Ehnts | Berlin School for Economics and Law