tag:blogger.com,1999:blog-11110174.post4265350064377049597..comments2024-02-26T23:17:11.132+13:00Comments on Blessed Economist: Credit MultiplierRon McKhttp://www.blogger.com/profile/03989126812730583009noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-11110174.post-7028242701587992922009-01-02T16:52:00.000+13:002009-01-02T16:52:00.000+13:00Thanks Jim. Good Article.I was not really trying ...Thanks Jim. Good Article.<BR/><BR/>I was not really trying to explain the process, just noting that mainstream economics texts just describe the expansion phase. The ignore contraction multiplier, even though it is more important.Ron McKhttps://www.blogger.com/profile/03989126812730583009noreply@blogger.comtag:blogger.com,1999:blog-11110174.post-56040897171417375332008-12-29T17:04:00.000+13:002008-12-29T17:04:00.000+13:00You are close, but not correct on the credit write...You are close, but not correct on the credit write-off. <BR/><BR/>Since financial institutions are subject to debt-equity ratios, a loss of capital may force a bank to recall loans. But it is the recall of loans -- the payment of loans -- that destroys money, not the write-off itself. <BR/><BR/>In addition, the central bank can destroy money by selling assets to financial institutions.<BR/><BR/>Great <A HREF="http://mises.org/story/2901" REL="nofollow">article</A> over at Mises.org.Jim Fedakohttps://www.blogger.com/profile/16380143827895514714noreply@blogger.com