BRIAN KANTOR: Money creation will help banks lend more to boost spending
Reserve Bank needs to follow other central banks and print more money to revive the economy
20 August 2020 - 15:29
How much income will be sacrificed for the lockdowns will depend on how quickly production (supply) and spending (demand) can be resumed. As always, supply and demand will depend on each other and respond together.
The more an economy is stimulated by way of government spending on relief and by monetary policy — lower interest rates and more money and credit supplied — the more demand will be exercised by consumers and expected by businesses. And the greater will be businesses’ willingness to tool up and hire people to satisfy demand...
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