, where banks make loans repayable in goods and depositors hold claims on the bank payable on demand in goods. Aggregate … production may be delayed in the economy. If so, we show that the level of ongoing bank lending, and hence of aggregate future … reduction of total output. A number of inefficiencies including bank failures can result if deposits turn out to be too high. We …

, undermining bank balance sheets and creating a global credit contraction. One consequence has been a dramatic shift in monetary … from bank balance sheets onto public sector balance sheets.Macromonetary models lag well behind these developments. The new … analysing the imapct of both central bank operations on commercial bank balance sheets, credit and the money supply. This is an …