Building a New Economics
The Debunking Economics Podcast
Banks, reserves, lending and money supply
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Banks, reserves, lending and money supply

How vast is the gap between textbook explanations of bank loans and what happens in reality? And how many people believe banks create new money, but with entirely wrong reasoning.

There’s a common myth around banks. That banks are the intermediaries who collect deposits from customers, keep a bit in reserve, then lend out the rest at a higher interest rate. That argument then extends to a multiplier effect, where the money loaned out is deposited in banks, freeing up more money for further loans. The multiplier is how textbooks a…

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Building a New Economics
The Debunking Economics Podcast
Economist Steve Keen talks to Phil Dobbie about the failings of the neoclassical economics and how it reflects on society.ems-based alternative to mainstream economics