Meyer, H. (2014) “How Money And Credit Work“, Social Europe Journal, 23 Ιουλίου.
Do you think that in recent years, as a result of the global economic crisis, the whole discussion about public policy has become increasingly focussed on economics? And that much of the policy discussion is based on core concepts that are quite poorly understood, including by many policy-makers? If your answer to these question is yes you are not alone.
At the root of much confusion about financial economics and how it works in reality is, in my view, the (not so) simple question of “what is money?” and closely related to this the question of “what is credit?”
Do you think that savers need to bring their money to the bank so you can take out a mortgage to buy a property? Think again. This is what you are often being told but this is not how it actually works. Do you think that banks predominately give out loans to finance productive investment? Also not true.
If you are now even more confused let me introduce you to some great new material published online that can really help you getting a grip on the subject. Some of it is not easy and some economics background certainly helps, but this should be also instructive for anybody interested in what money is, how it is created and how the credit system really works. If you work through the material it will take a few hours but it will certainly help your understanding. So here we go!
Σχετικές αναρτήσεις:
- Boskin J. Μ. (2014) “Europe’s Options“, Project Syndicate, 22 Ιουλίου.
- Bagus, P. (2010) “The Tragedy of the Euro“, Mises Institute.
- Krugman, P. (2013) “The Money Trap“, The New York Times, 14 Νοεμβρίου.