Who Gains and Who Loses from Russian Credit Expansion? (1994)

A. Richter

Chapter 24 in Tackling Inequality, 1999, pp 434-453 from Palgrave Macmillan

Abstract: Abstract When credit is created, it appears to help those who get it. But this conclusion does not follow, for an increase in credit also causes inflation. This reduces the value of the existing stock of money (or working capital). Thus the process of credit creation also imposes costs. At the same time that it replenishes the working capital of enterprises, it generates further inflation – which erodes that working capital. From the point of view of the economy as a whole, the process is thus largely self-defeating.

Keywords: Interest Rate; Inflation Rate; Commercial Bank; Banking Sector; Money Growth (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1057/9780230375284_24

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