How Money Is Created In The Modern World

How Money Is Created In The Modern World and Where It Is Going

Both banks and governments can create money “out of nothing”

Steve Keen
27 June 2023

This is a talk I gave to the Transparency Task Force, using my Minsky software to show that both banks and the government create money “out of nothing”–meaning that neither banks nor governments lend from a “pot” of money, nor do they need to borrow in order to create money. In a mathematical sense, both are “endogenous”: they don’t require any external input to kickstart money creation.

It is simply ridiculous how much of our current politics involves being ignorant about these basic facts about money creation.

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