Summary:
Banks are not intermediaries between savers and borrowers, and finance is not allocating existing savings to future investment. The opposite is true. Bank credit is self-funding; in credit extension, loans (assets) create deposits (liabilities). In finance as allocation of capital, investment creates saving.Lars P. Syll’s BlogKalecki and Keynes on the loanable funds fallacyLars P. Syll | Professor, Malmo University
Topics:
Mike Norman considers the following as important: john maynard keynes, loanable funds theory, michal kalecki, neoclassical economics, Post Keynesian Economics
This could be interesting, too:
Banks are not intermediaries between savers and borrowers, and finance is not allocating existing savings to future investment. The opposite is true. Bank credit is self-funding; in credit extension, loans (assets) create deposits (liabilities). In finance as allocation of capital, investment creates saving.Lars P. Syll’s BlogKalecki and Keynes on the loanable funds fallacyLars P. Syll | Professor, Malmo University
Topics:
Mike Norman considers the following as important: john maynard keynes, loanable funds theory, michal kalecki, neoclassical economics, Post Keynesian Economics
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The opposite is true. Bank credit is self-funding; in credit extension, loans (assets) create deposits (liabilities). In finance as allocation of capital, investment creates saving.
Lars P. Syll’s Blog
Kalecki and Keynes on the loanable funds fallacy
Lars P. Syll | Professor, Malmo University