Hierarchical money system exposes financial instabilities and asset booms.
The article explores how banks and other financial institutions create money in our current system. By looking at different levels of money creation, the researchers found a loop that can lead to financial instability. They argue that banning banks from creating money overlooks the role of securities and central banks in the financial system. The study suggests that the hierarchy of money is too expansive for full-reserve banking to be sustainable in the long run.