Economics

Endogenous Money

Endogenous Money

Endogenous Money is the theory that money exists as it’s needed from the economy, because bank process reserves are increased or decreased to allow for demand. Beneath the endogenous money principle, if banks could borrow money in the Federal Reserve discount rate nevertheless lend money of course profitably, then the money available for banks to borrow will become available to support the quality of consumer lending individual banks require.