Loanable funds vs money creation in banking: A benchmark result

We establish a benchmark result for the relationship between the loanablefunds and the money-creation approach to banking. In particular, we show that both processes yield the same allocations when there is no uncertainty and thus no bank default. In such cases, using the much simpler loanablefunds approach as a shortcut does not imply any loss of generality.

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Year of publication:	2017
Authors:	Faure, Salomon A. ; Gersbach, Hans
Publisher:	Frankfurt a. M. : Goethe University Frankfurt, Center for Financial Studies (CFS)
Subject:	money creation \| bank deposits \| capital regulation \| monetary policy \| loanable funds

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Series:	CFS Working Paper Series ; 587
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	1008766178 [GVK] hdl:10419/172466 [Handle] RePEc:zbw:cfswop:587 [RePEc]
Classification:	D50 - General Equilibrium and Disequilibrium. General ; E4 - Money and Interest Rates ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; G21 - Banks; Other Depository Institutions; Mortgages
Source:	EconStor

Persistent link: https://www.econbiz.de/10011764472