Monetary Realism from the Bank of England

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A cou­ple of weeks ago I took a swipe at Bank of Eng­land over a speech by its Gov­er­nor Mark Car­ney that was unre­al­is­tic about the dan­gers of a bloat­ed finan­cial sec­tor (Godzil­la is good for you? March 3). Today I’m doing the oppo­site: I’m doff­ing my cap to the researchers at Thread­nee­dle Street for a new paper “Mon­ey cre­ation in the mod­ern econ­o­my,” which gives a tru­ly real­is­tic expla­na­tion of how mon­ey is cre­at­ed, why this real­ly mat­ters, and why vir­tu­al­ly every­thing that eco­nom­ic text­books say about mon­ey is wrong.

The bank is going gang­busters to get its mes­sage across, with an intro­duc­to­ry paper on what mon­ey is, and two short videos on what mon­ey is and mon­ey cre­ation, both shot in its gold vault. It clear­ly wants eco­nom­ic text­books to throw out the neat, plau­si­ble but wrong rub­bish they cur­rent­ly teach about mon­ey, and con­nect with the real world instead.

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.