What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So theres no question of public spending crowding out private investment. Its exactly the opposite.
Posted on: Tue, 18 Mar 2014 13:47:25 +0000
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