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...

It is a well-establish opinion that money creation has its genesis in the loan activities of the goldsmith-bankers in seventeenth-century London. This is accurate for bank note money, which had its origin in the receipts for precious metal deposits issued by the goldsmith-bankers. However, money...

This paper presents a stock-flow consistent model+ of full-reserve banking. It is found that in a steady state, full-reserve banking can accommodate a zero-growth economy and provide both full employment and zero inflation. Furthermore, a money creation experiment is conducted with the model. An...

The economic crisis that began in 2007 and still lingers has invited comparison with the Great Depression of the 1930s. It has also generated renewed interest in Milton Friedman and Anna Schwartz's explanation of the latter as mainly the consequence of the Fed's failure as a lender of last...

Much intellectual energy has been devoted over many decades to the concept of money "demand" and its significance for monetary policy. It is obvious that the non-bank private sector (NBPS) does hold non-interest-bearing money (incongruously called money "demand") for specific purposes (in the...

Monetary literature remains plagued by references to money “supply” at a time when the endogeneity of money is becoming generally accepted. Money endogeneity is not a hypothesis; it is a fact, and one that has existed since a goldsmith-banker wrote out the first receipt (bank note) and...

Stablecoins rise to meet the demand for safe assets in decentralized finance. Stablecoin issuers transform risky reserve assets into tokens of stable values, deploying a variety of tactics. To address the questions on the viability of stablecoins, regulations, and the initiatives led by large...

During and after the Great Recession, the European Central Bank adopted unconventional monetary policies that are more or less uncontroversial in the literature. By contrast, its quantitative easing (QE) program that started in 2015 is highly disputed. The article evaluates the pros and cons of...

We study money creation and destruction in today's monetary architecture and examine the impact of monetary policy and capital regulation in a general equilibrium setting. There are two types of money created and destructed: bank deposits, when banks grant loans to firms or to other banks and...

We study money creation and destruction in today's monetary architecture within a general equilibrium setting. Two types of money are created and destructed: bank deposits, when banks grant loans to firms or to other banks, and central bank money, when the central bank grants loans to private...