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Where Does Money Come From?
 
 

Where Does Money Come From? [Kindle Edition]

Josh Ryan-Collins , Tony Greenham , Richard Werner , Andrew Jackson
4.8 out of 5 stars  See all reviews (18 customer reviews)

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Product Description

Product Description

Where Does Money Come From? reveals how, contrary to public perception, the bulk of today's money supply is created and allocated by commercial banks in their role as providers of credit. The authors argue that this system is inherently unstable, with little effective regulation of how much credit is provided or whether it is used for productive or speculative purposes. Based on detailed research and consultation with experts, including from the Bank of England, Where Does Money Come From? reviews theoretical and historical debates on the nature of money and banking and explains the role of the central bank, the Government and the European Union. This Second edition includes new sections on Libor and quantitative easing in the UK and the sovereign debt crisis in Europe.

Praise for Where Does Money Come From?

“Refreshing and clear. The way monetary economics and banking is taught in many – maybe most - universities is very misleading and what this book does is help people explain how the mechanics of the system work”.
David Miles, Monetary Policy Committee, Bank of England

“It is amazing that more than a century after Hartley Withers’s The Meaning of Money and 80 years after Keynes’s Treatise on Money, the fundamentals of how banks create money still need to be explained. Yet there plainly is such a need, and this book meets that need, with clear exposition and expert marshalling of the relevant facts. Warmly recommended to the simply curious, the socially concerned, students and those who believe themselves experts, alike. Everyone can learn from it“.
Victoria Chick, Emeritus Professor of Economics, University College London.

I used Where Does Money Come From? as the core text on my second year undergraduate module in Money and Banking. The students loved it. Not only does it present a clear alternative to the standard textbook view of money, but argues it clearly and simply with detailed attention to the actual behaviour and functioning of the banking system. Highly recommended for teaching the subject. Dr Andy Denis, Director of Undergraduate Studies, Economics Department, City University, London

About the Author

JOSH RYAN-COLLINS is a Senior Researcher at nef (the new economics foundation) where he is leading a programme of research on the history and practice of monetary systems. He is studying for a PhD in finance at the University of Southampton. TONY GREENHAM is Head of Finance and Business at nef. He is a former investment banker, a Chartered Accountant and regular writer and media commentator on banking reform. PROFESSOR RICHARD WERNER is Director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton and author of two best-selling books on banking and economics. He is credited with popularising the term 'quantitative easing' in 1994 whilst Chief Economist at Jardine Fleming Securities (Asia), following a spell as visiting research fellow at the Japanese Central Bank. ANDREW JACKSON contributed to this book after graduating from the University of Sussex with an MSc in Development Economics. He is currently studying for a PhD in finance at the University of Southampton. JOSH RYAN-COLLINS is a Senior Researcher at nef (the new economics foundation) where he is leading a programme of research on the history and practice of monetary systems. He is studying for a PhD in finance at the University of Southampton. TONY GREENHAM is Head of Finance and Business at nef. He is a former investment banker, a Chartered Accountant and regular writer and media commentator on banking reform. PROFESSOR RICHARD WERNER is Director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton and author of two best-selling books on banking and economics. He is credited with popularising the term 'quantitative easing' in 1994 whilst Chief Economist at Jardine Fleming Securities (Asia), following a spell as visiting research fellow at the Japanese Central Bank. ANDREW JACKSON contributed to this book after graduating from the University of Sussex with an MSc in Development Economics. He is currently studying for a PhD in finance at the University of Southampton.

Product details

  • Format: Kindle Edition
  • File Size: 2288 KB
  • Print Length: 184 pages
  • Page Numbers Source ISBN: 1908506237
  • Simultaneous Device Usage: Unlimited
  • Publisher: The New Economics Foundation; 2 edition (24 Sep 2013)
  • Sold by: Amazon Media EU S.à r.l.
  • Language: English
  • ASIN: B00FFAKEQU
  • Text-to-Speech: Enabled
  • X-Ray:
  • Word Wise: Enabled
  • Average Customer Review: 4.8 out of 5 stars  See all reviews (18 customer reviews)
  • Amazon Bestsellers Rank: #67,999 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

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4.8 out of 5 stars
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Most Helpful Customer Reviews
11 of 11 people found the following review helpful
5.0 out of 5 stars Essential reading on a much misunderstood topic 17 Dec 2012
Format:Hardcover
NEFs book deals with a topic - banking and money creation - misunderstood not just by most of the public, but by most politicians, many economists (some extremely prominent) and many bankers. 97% of the money in the British economy is ultimately credit created by commercial banks, which is then destroyed upon repayment. To understand why credit *is* money - legal tender - read this book. To understand what limits the amount of money commercial banks can create, and why those restraining mechanisms broke down, or to understand the role of commercial money creation, when combined with modern financial instruments, in the crash of 2008, or to understand the unique legal privileges given to banks and the critical role this can play in inflation - read this book.

Its accessible, brilliantly researched and written, relatively short and is essential reading for anyone who wants to understand modern banking and how it affects the economies we all work within.

I reviewed the book at length at openDemocracy, I dont know if links are allowed in reviews but a search for "The Uneconomics guide to money creation" will bring it up.

This is a superb book, and great to see a second edition out. Highly recommended.

Oliver Huitson
Co-editor
openDemocracy
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5 of 5 people found the following review helpful
Format:Hardcover|Verified Purchase
As other reviews, i really advice this book. Is a must read if you really want to understand how the system works, and what is money now days. Worths every penny, and i would say that is the best book in Amazon describing perfectly this subject. It outdates all books written before.

The book describes how the models used by institutions as IMF, World Bank or economists researchers, are totally outdated. They still study the 'machine' (macroeconomics) describing banks as neutral models agents in money supply. They still think that central banks can manipulate money supply thanks to the multiplier effect. And that are one of the big holes. First at all, banks are not neutral, because they are very important allocating resources. And more than that, they allocate more credit ('money') for operations with collateral (real state), than for business (they do not have collateral/asset at all if business fail). In regard to the second point, central banks can't control credit creation anymore. Banks do not need new deposits to create new credit anymore, because now days the procedure is in reverse: banks ask for reserves on demand.

The book is superb, and i would give 5 or 10 stars. The reason i give 4 in stead of 5, is that it leaves some important points that are a must if you want to understand the 'machine'.

1. the book do not cover in depth how banks dont need bank deposits anymore to create credit, but use collateral chains (shadow banking). Collateral chains are securities, debt, bonds, REPOs... pledged from one party (Banks, Hedge Funds etc...) to another for credit. If now days QEs and LTROs are not injecting inflation into the economy is because all this liquidity is being used to fill the banks hole in the shadow economy (used as reserves).

2.
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6 of 6 people found the following review helpful
Format:Hardcover
As a former Bank of England employee who spends a lot of time to both economists and non-economists about the UK banking system, I found this book incredibly helpful.

For me, it is one of the best descriptions of the UK monetary and banking system. Best of all it is accessible to everyone, not just those with an understanding of finance and economics.

Highly recommended for anyone with an interest in money, finance or economics. Especially recommended for economics students, who get taught a misleading/out of date account of money creation in undergraduate macroeconomics.
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5 of 5 people found the following review helpful
5.0 out of 5 stars A must-read 18 Dec 2012
By lMV
Format:Hardcover
A PhD in Economics, I understood the functioning of the banking system only by reading this book.
An absolute must-read for anyone studying economics.
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Format:Kindle Edition|Verified Purchase
This book gives a clear pathway through the fields of economic jargon and explains what the words mean. It backs up its explanation by giving sources. It ends with the famous quote on banking by J k Galbraith. "The process by which banks create money is so simple that the mind is repelled. When something so important is involved, a deeper mystery seems only decent."
The establishes that there is no deeper mystery . The book ends 'we must not permit our minds to be repelled, because it is only through the application of proper analysis and further public and policy debate, that we can collectively address the much more significant and pressing question of whether our current monetary and banking system best serves the public interest and, if not how it should be reformed.'
Indeed, this is probably the most important economic and political issue facing us today and the book helps to understand what the options for change are.
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1 of 1 people found the following review helpful
5.0 out of 5 stars WORTH EVERY PENNY 29 April 2013
Format:Hardcover|Verified Purchase
I can't really add anything of value to what has already been said about this excellent book. While it may be short on pages it is very long on content: a really clear and concise explanation of the mystery of money; its origin and workings. If you have any interest in the subject, as any responsible person should, it's a no brainer. Buy it, read it and revel in the mystery unraveled!
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Most Recent Customer Reviews
5.0 out of 5 stars Eye opening !
Eye opening and fascinating insight into the money supply and in particular the power of commercial banks who are the major creators of new money in the economy. Read more
Published 1 month ago by Curtis Slamdog
4.0 out of 5 stars Not bad.
A pretty good description of monetary systems but with one or two errors, notably a misunderstanding of the issue of Treasury (Bradbury) notes at the start of World War 1.
Published 7 months ago by Brian Morris
5.0 out of 5 stars Banks and the money supply
It was a revelation to realise that commercial banks create money by making entries in their computers. Read more
Published 8 months ago by Mr J R Roaf
5.0 out of 5 stars we have to understand money
The main purpose of 'Where Does Money Come From' is to illustrate how the current system works. Obviously, money plays a critical role in all our lives. Read more
Published 9 months ago by L. Baker
5.0 out of 5 stars Something we need to know
This is a clear book on an important topic. I hope there will be wider discussion on how we can manage money supply better. Read more
Published 10 months ago by Pat
5.0 out of 5 stars Outstanding
This is the first and only book I have ever read which accurately describes the hugely significant credit-creation power of the banking sector. Read more
Published 11 months ago by Lutatius
4.0 out of 5 stars Very Informative if a bit dry at times.
Based on the complexity of the subject matter this book sometimes became tough to plough through but what a great insight into the way money is created in the UK. Read more
Published 11 months ago by John Smith
5.0 out of 5 stars A pocket guide to where it's all gone wrong
Fascinating insight for the un-initiated to where the north atlantic crisis came from and why its still a problem. Should be handed out at railway stations and in schools. Read more
Published 12 months ago by Mr. David J. Uhlar
5.0 out of 5 stars Quality...
Could not get this last year for my fiance so managed to this year and he has not even asked for it ha!! It will be lovely surprise for him. Read more
Published 12 months ago by chic121
5.0 out of 5 stars Fascinating
A detailed, objective, and necessary description of UK banking and money creation. The book shines a light on what many see as a black art, but is of fundamental importance to all... Read more
Published 12 months ago by Mrs Ulphat Burton
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