We’ve spent two weeks looking at fractional reserve banking, and I pointed out that although this is the model presented by textbooks, it bears very…
Tag: saving
Last week we added Fractional Reserve Banking to our “engine”, where the bank acts as an intermediary between savers and borrowers, keeping a fraction of…
Dynamicland has a neighbour, Multiplyland – and they’ve invented banks. It’s such a great innovation that Bob moved to Multiplyland, so he can put his…
Decisions about who to allocate credit to, and how much credit to allocate, are absolutely fundamental to the path the economy takes in the future.…
Remember Bob, the saver in Orderlyland who caused the economy to slow down? Let’s suppose he moves to Dynamicland, excited by the prospect of the…
Last week I compared the economy to an engine, and gave you an overview of a few components particularly relevant to the question of how…
If we want to produce enough for everyone, we need to invest in that productivity, and therefore we want our savings (i.e. our pensions) to be channelled to productive investment.