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 currently in existence is created by the private sector,...

The perils of private bank creation of money using the fractional reserve system were discovered by many economists in the aftermath of the Great Depression. They formulated the “Chicago Plan” for 100% reserve banking which would give the state exclusive power to create money. Strict...

Many authors have described and modelled Keynesian effects in a Baby-sitting Cooperative (BSC), which has the underlying structure of a single good barter economy. We construct a simple model of the BSC economy to explore this issue, and find very surprising results. Outcomes depend on agents...

Money acquires value because it is “legal tender” – that is, by sovereign authority. Nonetheless, the power to create money has been highly contested, and has frequently been hijacked by private parties. The battle between the state and haute finance to control the power of money creation...