modern monetary theory, endogenous money, fractional reserve banking, money multiplier

Editor's Note: Since I've been harping on the ways in which Modern Monetary Theory misrepresents institutional realities, I thought it worthwhile to republish the following essay by occasional Alt-M contributor Julien Noizet, from his personal blog Spontaneous Finance. The essay originally appeared on December 17, 2013. Two…

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…