| Popis: |
We single out the banking industry for special attention because the l.O.U.'s of its firms are a convenient form of money. What merits primary attention is the total of these I.O.U.'s, how it changes and how it may be controlled. I contend that current standard texts unnecessarily divert much attention, time and effort to the explanation of two ideas that are misleading and relatively unimportant. The texts elevate an operating rule-ofthumb for small banks into an economic principle, and laboriously illustrate the trivial idea that the total deposits created by all banks exceeds the total created by any one of them. It is never easy to break free from set ways of thinking. There is a need to do so in the teaching of money creation. |
