Tag Archives: loanable funds theory

Keeper quote from Joseph Schumpeter. He nailed endogenous money as "credit money" and observed correctly how "money" gets created by banks' extending credit — "they create deposits in their act of lending." This effect is now amplified through non-bank and quasi-bank financial institutions. The contemporary financialized economy runs largely on privately created credit. This has an even greater effect than Schumpeter likely anticipated. Economists' ignoring this unduly limit the scope of...

The battle of the titans. Or maybe better, David and Goliath. We have to free ourselves from the loanable funds theory — and scholastic gibbering about ZLB — and start using good old Keynesian fiscal policies. Keynes — as did Lerner, Kaldor, Kalecki, and Robinson — showed that it was possible to promote economic growth with an “appropriate size of the budget deficit.” The stimulus a well-functioning fiscal policy aimed at full employment may have on investment and productivity does not...

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

Like Keynes said.Lars P. Syll’s BlogThe causes of secular stagnation and the loanable funds theoryLars P. Syll | Professor, Malmo University

What follows is very unorthodox thinking even among the heterodox. It’s well beyond and different from MMT’s utterly convincing takedowns of “loanable funds” notions, for instance. So take it as the ravings of an internet econocrank, if you will. But here it is FWIW.... AsymptosisThe Mysterious Stock of “Loanable Funds” Steve Roth

Quote from Giancarlo Bertocco, "Some Observations About The Loanable Funds Theory" Lars P. Syll’s BlogKeynes vs. Wicksell — the loanable funds theoryLars P. Syll | Professor, Malmo University