Money is credit-driven and demand-determined: Shaping the future of economics
Endogenous money theory suggests that the amount of money in a country is determined by the demand for bank credit, which comes from the needs of finance for productive and speculative activities. This theory challenges the traditional view of how money is created and circulated. Recent research has refined and supported this theory with new evidence, leading to ongoing debates within the field. Post Keynesian economists have made progress in understanding how different agents influence the money supply process.