Money Supply Endogenous

Discussion in 'Economics' started by morganist, Jun 7, 2010.

  1. I have seen this debate on the Marc Faber thread. The idea of whether the market creates the desire to hold credit and thus determines the money supply or whether the institutions do.

    You assume it is static perhaps it is different at different times. Perhaps sometimes the market determines the money supply and others depending on the Government the institutions do.

    I am not a fan of this credit money supply theory. To me it only takes one aspect of money supply into consideration. There is also fiscal policy, personal spending habits pensions etc, international demand, corporate attitudes, to name a few.

    Any thoughts.