Money Creation in the Modern Economy

Katalin Botos

Public Finance Quarterly, 2016, vol. 61, issue 4, 442-457

Abstract: An age-old debate has recently resurfaced in the columns of a daily newspaper Money creation in practice. Misconceptions and reality. Is the issue still topical; indeed, is it one of journalism? Especially since the crisis, the public is still highly preoccupied with how banks have come to have so much money. Experts in professional circles believe they know how money is created. The textbooks used in economics education to this date teach the theory of traditional money multiplication. But nobody seems to be interested in what the essence of money is – which in fact is not independent of its creation. As the saying goes, it is not important what money is, only the effect it has.

Keywords: money creation; financial crisis; securities market (search for similar items in EconPapers)
JEL-codes: E40 E44 E50 E52 E58 E60 F30 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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