The (other) deleveraging: What economists need to know about the modern money creation process

Manmohan Singh, Peter Stella 02 July 2012

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One of the financial system’s chief roles is to provide credit for worthy investments. Some very deep changes are happening to this system – changes that surprisingly few people are aware of. This column presents a quick sketch of the modern credit creation and then discusses the deep changes are that are affecting it – what we call the ‘other deleveraging’.

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Topics:  Macroeconomic policy

Tags:  monetary policy, Central Banks, money multiplier, Pledged collateral, re-pledging, private money creation

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