Tag Archives: credit theory of money

As I mentioned earlier, the vast bulk of broad money consists of bank deposits. These banking liabilities are created when an Australian household or business has funds credited to their deposit account at an Australian bank. One way this can occur, for example, is when a business deposits currency it has earned with its bank. Again, such transactions add to deposits but do not create money because the bank customer is simply exchanging one type of money (currency) for another (a deposit)....

Thousands of years ago, money was a means of debt payment, archaeologists and anthropologists say. Useful summary of the history.Science NewsConflict reigns over the history and origins of money Bruce Bower

Superb Schumpeter quote on credit as money. He gets it right. Keeper. BTW, Hyman Minksy was Schumpeter's student and MMT economist Randy Wray was a student of Minsky.Lars P. Syll’s BlogSchumpeter — an early champion of MMTLars P. Syll | Professor, Malmo University

Egypt’s monetary system began with barter. It was primarily based on agriculture – grain. This evolved into official Graineries and a farmer would then take his crop to the Grainery and receive a receipt. With time, the monetary system evolved where people would then accept these receipts (paper money) in payment. The receipt  would have been a credit slip representing the liability of the granary.Armstrong EconomicsThe First Representative Form of Money Martin Armstrong

Most mainstream economists seem to think the idea behind Modern Monetary Theory is something new that some wild heterodox economic cranks have come up with. New? Cranks? How about reading one of the great founders of neoclassical economics — Knut Wicksell. This is what Wicksell wrote in 1898 on ‘pure credit systems’ in Interest and Prices (Geldzins und Güterpreise): Lars P. Syll’s BlogMMT — the Wicksell connectionLars P. Syll | Professor, Malmo University

Neolithic and Bronze Age economies operated mainly on credit. Because of the time gap between planting and harvesting, few payments were made at the time of purchase. When Babylonians went to the local alehouse, they did not pay by carrying grain around in their pockets. They ran up a tab to be settled at harvest time on the threshing floor. The ale women who ran these “pubs” would then pay most of this grain to the palace for consignments advanced to them during the crop year. These...