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The standard MMT position is that the money multiplier is wrong (doesn't exist in the real world of banking). MMT explains this is in terms of the erroneous loanable funds assumption.Brian looks at the assumptions of the model, on which the model is built. There are still quite a few people that believe in the money multiplier and it appear to be still prevalent in texts books. So it is worthwhile knowing the background, which Brian's post summarizes.Bond Economics Primer: Understanding The Money Multiplier ModelBrian Romanchuk
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The standard MMT position is that the money multiplier is wrong (doesn't exist in the real world of banking). MMT explains this is in terms of the erroneous loanable funds assumption.The standard MMT position is that the money multiplier is wrong (doesn't exist in the real world of banking). MMT explains this is in terms of the erroneous loanable funds assumption.Brian looks at the assumptions of the model, on which the model is built. There are still quite a few people that believe in the money multiplier and it appear to be still prevalent in texts books. So it is worthwhile knowing the background, which Brian's post summarizes.Bond Economics Primer: Understanding The Money Multiplier ModelBrian Romanchuk
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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Brian looks at the assumptions of the model, on which the model is built. There are still quite a few people that believe in the money multiplier and it appear to be still prevalent in texts books. So it is worthwhile knowing the background, which Brian's post summarizes.
Bond Economics
Primer: Understanding The Money Multiplier Model
Brian Romanchuk