The endogenous-exogenous money debate is a futile one. Exogenous money creation, based on the money multiplier, is not a money creation process. Rather, it is a monetary policy model, but in it money is still created endogenously: bank loans (and foreign asset accumulation by banks) concurrently...

Exogenous money creation does not exist, but did under a past specie-money system. Central bank control of bank reserves and therefore control of bank deposit (money) creation via the money multiplier can exist, but this has nothing to do with the process of money creation. Rather, it is a style...

In a number of financial market texts the bid-offer spread in flow markets is not well depicted. In such markets the demand and supply curves to the left of the equilibrium point cannot exist. This article offers an alternative depiction: only the curves to the right of the equilibrium point...

There is an immense body of literature on the relationship of money and output, with result-integrity depending on the aggregates used. This paper proposes an alternative two-step approach, based on the reality that: (1) money creation is just the outcome of new bank loans extended, and (2) the...

Many scholars have fought valiantly to change perceptions on the process of money creation. However, misconceptions remain in place some quarters. In order to demonstrate empirically that a new bank loan creates a new bank deposit (without the bank having to recruit a new deposit), the author...

The state of bank liquidity, measured as the banks' net excess reserves (NER) with the central bank, is a critical element of the successful implementation of monetary policy. Central banks have absolute control over NER and manipulate it to bring about a positive NER (in QE periods) to drive...

There is a profound misconception amongst certain commentators on money and banking: that quantitative easing creates new money. The misconception is either: (1) that new money is injected into the economy; (2) newly created excess reserves can be used by the banks to make new loans. Neither of...

It is sometimes stated that government spending leads to money creation, at the same time providing the banks with excess reserves, leading to further money creation. This is so, but the statement ignores the fact that the money stock (and reserves) was depleted when revenue was raised in order...

The origins of monetary policy can be traced back to the days of the goldsmith-bankers when a reserve of gold coins was held by them to meet the promise stated on their bank notes: that they could be exchanged for gold. However, this covenant was doomed from the start, due to the avarice of...