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There's really no evidence for that. The evidence is that the American banking system doubles its money (and direct lending) every decade, and has done for the
by neffy 10y ago
There's really no evidence for that. The evidence is that the American banking system doubles its money (and direct lending) every decade, and has done for the last 50 odd years. If there was actual weak demand, you would expect it to stop expanding, or expand at a lower rate, and that's exactly what you don't see.
Compare and contrast with the UK for example (M3, because no standard definitions etc.):
https://research.stlouisfed.org/fred2/series/MABMM301GBM189S https://research.stlouisfed.org/fred2/series/MABMM301GBM189S
The UK btw, doesn't have a formal central bank reserve percentage (it has fairly minimal liquidity provisions which are the same thing, but still). Economics needs to wake up and realise it does not understand how the monetary system actually works.
- roymurdock 10y agohttps://research.stlouisfed.org/fred2/series/M2V https://research.stlouisfed.org/fred2/series/M2V addresses your argument about the money supply. Important to look not only at the aggregate amounts, but the velocity of money to see spend/save trends. But there are a lot of other economic indicators that you need to consider outside the money supply when talking about aggregate demand. Look at interest rates as one example, which are a proxy for how expensive (highly demanded) money is, and ask yourself why they are at an all-time low and stagnating at the ZLB, with short-term rates even going negative in some countries.