money

I think the real difference between what Nick Rowe is saying and what people like Scott Fullwiler and Steve are saying is that Nick believes over the medium-term, central bank interest rate policy is endogenous. What I think Nick means is…

In Paul Krugman’s view, banks are not very important since all they do is to intermediate between savers and investors, taking in deposits and packaging them into loans. Now, I know that Krugman’s own specialty is not money and banking, so…

The debate between Paul Krugman and my friend Steve Keen regarding how banks work (see here, here, here, and here) has caused me to revisit an old quote. Back in the 1990s I would use Krugman’s book, Peddling Prosperity (1995), in my…

Paul Krugman’s claim that those who argue banks play an essential role in macroeconomics are “Banking Mystics” has a natural riposte: Neoclassical economists like Krugman who believe that capitalism can be modelled without either money or…

Alan Holmes wrote in 1969 that "in the real world, banks extend credit, creating deposits in the process, and look for the reserves later." Holmes would turn in his grave at Krugman’s naïve assertion, half a century later, that banks need…

My friend Steve Keen recently presented a “primer” on Hyman Minsky. In his piece, Steve criticized the methodology used by Paul Krugman and argued that Krugman could learn a lot from Minsky. In particular Krugman’s equilibrium approach and…

Minsky's “Financial Instability Hypothesis” is one of the key foundations of Steve Keen's approach to economics. Minsky has come into vogue these days of course, but to people who’ve known his work for several decades rather than ever since…

This daily commentary is a bronze level members-only post. I saw a number of commentaries this past weekend and late in the week that were gloomier than one would have expected. In the US, consumer credit is expanding as are jobs and most…

If and when the demand for credit increases, so too will the money supply.

We (also) do not want black helicopters flying around dropping bags of cash; and we (also) oppose government “pump-priming” demand stimulus—the libertarians and Austrians and even Milton Friedman are correct in their argument that this…