Monetary policy all over the world has followed the advice of the stabilizers.
It is high time that their influence, which has already done harm enough, should be overthrown.
F. A. Hayek, 1932
Money and banking combine as a subject too important to not understand.
Money plays an extremely important role in the operation of any economy. Banking provides the infrastructure and tools for the storing, transfer, and (regrettably) the creation of money. Yet, so few people understand the topics that make up the subject money and banking.
In this section we will examine some of the more complex elements in the topics of money and banking.
Money basics include discussions about economic exchange, the definition of money, the role of money, and the source and measure of the value of money.
Understanding money, of course, requires understanding some basic concepts regarding money. What's the definition of money? What's the role of money? Etc.
What effects do artificial changes in the quantity of money have on the economy.
Many myths have grown up around the subject of Money & Banking, e.g. money=debt, money must grown perpetually, and more. I will address the myths that seem to have achieved some popularity.
Because of its complex role in the operation of markets, many myths have grown up around the subject of money. I will address many of the more popular myths about money and show why most of them lack logical consistency.
The idea that money equals debt become one of the more popular myths. This myth seems to have grown out of a misunderstanding of bank accounting. I will explain the logical inconsistency in the idea of money equaling debt.
A fairly large number of economists, some of them quite well respected, believe that the quantity of money must continue to grow perpetually. They give several basic reasons for this belief, but none of those reasons make much sense.