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>The only thing you need to prevent is people and organisations sitting on idle cash or cash like investments. That's what destroys the economy. Not true. Cas
by brc 11y ago
>The only thing you need to prevent is people and organisations sitting on idle cash or cash like investments. That's what destroys the economy.
Not true. Cash kept in banks is reinvested in the economy. If companies like Apple keep billions in the bank, it has the effect of lowering interest rates and therefore encouraging investment.
Clarity in economic thought comes when this incorrect bit of Keynesian relic thinking is discarded.
- BenoitEssiambre 11y agoBanks are organisations, I include them in this, you need to prevent banks from not lending. >"it has the effect of lowering interest rates" Not when we are already at the zero lower bound. At the ZLB you need higher inflation targets for things to function properly.