Library
Topics
Eight connected pillars: money creation, banking, the Federal Reserve, monetary policy, money supply, financial risk, macroeconomics, and deflation.
Money creation in the modern economy
Most money is created by commercial banks when they lend. Here is the balance-sheet mechanics, the limits, and why it matters.
ReadThe banking system
Banks create deposits, transform maturity, and run the payment system. That combination is productive, and it is fragile.
ReadThe Federal Reserve
The Fed sets the policy rate, supplies reserves, and acts as lender of last resort. It is central to the system, but it is not the only actor that creates money.
ReadMonetary policy
Monetary policy works through interest rates, credit conditions, asset prices, expectations, and the exchange rate. The transmission is powerful, but uneven.
ReadThe money supply
M0, M1, and M2 measure different layers of money. None of them is a simple policy lever.
ReadFinancial risks
Credit creation makes the financial system useful and fragile. Leverage, maturity mismatch, and confidence are the core mechanisms.
ReadMacroeconomics
Credit, spending, income, and output are entangled. Sectoral balances and debt cycles help explain why macro outcomes are not just about money.
ReadDeflation risk
Deflation is a sustained fall in the general price level. It can be benign or corrosive; debt makes the difference.
Read