Banks as accelerators of the circulation of money

Laurent Le Maux

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Abstract: The money multiplier approach asserts that banks are unique in that they implement a creation of money, while the finance approach regards banking institutions as financial intermediaries among others. In retrospect, Cantillon's Essai stands between these two extreme approaches. It both challenges the money multiplier approach and grants to banks a significant monetary role. The aim of the paper is to clarify Cantillon's theoretical propositions on bank issuing of debts convertible on demand into money at face value and to explore further the proposition according to which banks contribute to accelerating the circulation of money.

Keywords: Cantillon; circulation of money; money multiplier (search for similar items in EconPapers)
Date: 2015-09-01
Note: View the original document on HAL open archive server: https://hal.science/hal-01397044
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Published in Eastern Economic Journal, 2015, 41 (4), ⟨10.1057/eej.2014.75⟩

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Journal Article: Banks as Accelerators of the Circulation of Money (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01397044

DOI: 10.1057/eej.2014.75

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