Monetary theory texts teach that governments create money and control monetary policy. Researchers at the Bank of … England, IMF and many others show that fractional reserve banking allows the private sector to create money. Most money … based debt is intimately connected to the process of money creation in the modern financial system. It should be obvious …

A wide range of heterodox theories claim that banks are special because they create money in the act of lending. Put …

This paper advances three fundamental propositions regarding money: (1) As R. W. Clower (1965) famously put it, money … buys goods and goods buy money, but goods do not buy goods. (2) Money is always debt; it cannot be a commodity from the … possible. These three propositions are used to build a theory of money that is linked to common themes in the heterodox …

body of recent work on money, banking, payments systems, asset markets, and related topics. A key principle in New … inflation, the relationship between money and capital accumulation, and the Phillips curve. We also extend the benchmark model …

We establish a benchmark result for the relationship between the loanablefunds and the money-creation approach to …

. Specifically, they characterize the optimal return on money in the presence of credit arrangements. There is a dual role for credit …: It allows buyers to trade without fiat money and also permits them to borrow against future income. However, not all … traders have access to credit. As a result, there is a social role for fiat money because it allows agents to self …