Monetary System

I knew Charles Keating, the head of Lincoln Savings, in my capacity as a financial regulator and as the subject of his wrath. His fraud schemes and the manner in which they targeted our system’s vulnerabilities in an era before Citizens…

I have been saying for years now that the money multiplier does not adequately explain how money is created in a modern fiat money economy. In particular, the idea that banks are passive intermediaries who simply respond to injections of…

Private loan balances in the euro area continue to decline. Last month's drop of 2.2% from the previous year was worse than had been expected by economists.

By Frances Coppola Scott Sumner argues that when the monetary base is fixed, low interest rates are deflationary. I've emphasised the fixed monetary base because it is an important condition. If the monetary base is NOT fixed then the…

Andrea Terzi Dr. Terzi is a Professor of Economics at Franklin University Switzerland and a Research Associate with the Levy Economics Institute of Bard College. One thing’s for sure: The financial crisis has dealt a deadly blow to what…

I’m doffing my cap to the researchers at Threadneedle Street for a new paper “Money creation in the modern economy,” which gives a truly realistic explanation of how money is created, why this really matters, and why virtually everything…

So finally we get to see what the Yellen Fed is all about. And it is not as dovish as people thought it would be.While the noises Yellen made concerning the jobs market came across as dovish, behind the scenes a more hawkish tone has…

Here is a chart showing the number of transactions that involve acquisitions of an asset management business by year. It tells us about a couple of trends developing in recent years.

From Minsky’s earliest work, he adopted what became known as the “endogenous money” approach that was revived by Post Keynesians in the 1980s. It is useful to return to Krugman’s critique of Minsky to compare Minsky’s early view of banking…

Loan growth rate in the US, while better than in the Eurozone, remains on a downward path. The latest figures suggest that loans are increasing at less than 2%, while deposits continue to grow at 6-7% per year.