File:Loanable funds, money multiplier, money creation (3 types of theories) without almost forgotten Credit Mechanics (table by IMF 2019).png

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Table: Three types and views of different money supply theories.

In accordance to BoE, McLeavy et al. (2014), Jakab/Kumhof (2015), IMF (2019) postulates money creation view as valid only ("Money creation not a theory but an accounting reality") – this view presented to OECD NAEC (Paris, 15. April 2019) includes monocausal explanation of the financial crisis: "Understanding of money creation ‘cyclical’, resurfacing after ‘heavy recessions’, as after 1930s and 2007-09." (IMF 2019, Gross/Siebenbrunner).

Note: For example they do not mention speculative credites (even during goldbased currencies and growing speculative wall street boom as before black thursday 1929) as causal for financial system fragility.

Criticism of one-sided presentation ("partially true") you can find within:

„Credit mechanics overcomes a one-sided, bank-centric view of money creation, which is often encountered in monetary theory. [...] the money supply is influenced by the interplay of loan creation and repayment rates.“

– Frank Decker, Charles Goodhart (2018): Credit Mechanics, A precursor to the current money supply debate
Date
Source International Monetary Fund (IMF), Gross, Siebenbrunner: Money Creation and Liquid Funding Needs (PDF), p. 2.
Author Marco Gross (IMF), Christoph Siebenbrunner (Oxford University)
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Public domain This image of simple geometry is ineligible for copyright and therefore in the public domain, because it consists entirely of information that is common property and contains no original authorship.
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Other versions
Highly influental postulation by Bank of England, McLeavy et al. (2014). Fusioned pic shows commercial bank(s) balance sheets granting loan - aggregated vs. single view. BoE single bank view explanation seems (partially) not consistent.
Credit Mechanics: 4 Inter- relations governing the credit volume (by Decker/Goodhart 2021).

Captions

Money supply theories in chronological order: 1. Loanable funds, financial intermediary, 2. Fractional reserve/money multiplier theory 3. money creation theory ("out of thin air") even by single commercial bank and hence the banking system ("FMC").

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current12:52, 29 August 2023Thumbnail for version as of 12:52, 29 August 2023904 × 444 (91 KB)Carlbrandner{{Information |Description=Table: Three types and views of different [https://en.wikipedia.org/wiki/Money_supply money supply] theories. |Source=International Monetary Fund (IMF), Gross, Siebenbrunner: [https://www.oecd.org/naec/new-economic-policymaking/Money_Creation_and_Liquid_Funding_Needs_%20NAEC_Siebenbrunner.pdf ''Money Creation and Liquid Funding Needs''] (PDF), p. 2. |Date=2019 |Author=Marco Gross (IMF), Christoph Siebenbrunner (Oxford University) |permission= {{PD-shape}}[[Category...
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