Fritz Machlup, fractional reserve banking, credit creation, bank credit, Alt-M Classics

[Having drawn attention in my last post to Fritz Machlup's superb 1940 book, The Stock Market, Credit, and Capital Accumulation, it occurred to me that  excerpts from that work concerning the circumstances in which an increase in the supply of "fiduciary" bank credit will not promote an…

monetary policy, normalization, Federal Reserve, Fed, 2008 financial crisis

Ten years after the 2008 financial crisis we are again facing the possibility of economic turmoil as the Fed and other central banks exit their unconventional monetary policies by raising interest rates and shrinking their balance sheets. Although central banks will move gradually, unforeseen circumstances could trigger…