Part 5: Introducing Post-Keynesian Economics

I disagree with the following:

Part 5: Introducing Post-Keynesian EconomicsThough the central bank can, theoretically, increase the amount of reserves as much as it likes, this is largely pointless exercise as it cannot control broader measures of the money supply (or income).

via Introducing Post-Keynesian Economics.

It is not that the Fed cannot push the money out the door so to speak. It is that the Fed has deliberately chosen not to. It could run up interest rates, charge the banks more than those rates on their excess reserves, and keep reserves growing.

This is not something that has been imagined yet by the Federal Reserve or anyone else of whom I'm aware.

This is one point why I maintain that the Money Multiplier, while not being exercised much at all, still exists.

You may start here to see what I've written recently on it:

Part 1: My Questions to L. Randall Wray on the Money Multiplier.

Part 2: My Questions to L. Randall Wray on the Money Multiplier

Part 3: "Money-Multiplier Myth" Inconclusive

Part 4: Exit-path implications for collateral chains | vox

Part 6: Ed Dolan's Econ Blog » Whatever Became of the Money Multiplier?

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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