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The Ethics Inside the Monetary Circuit: How Bank’s Social Responsibility Affects Money Creation

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  • Nadia Oliva
  • Andrea Pacella

Abstract

The paper aims to introduce ethical remarks into the monetary circuit (or monetary theory of production)approach in order to study the mechanism of money creation when banks discriminate production on an ethicalplane. By the micro-foundation of the banks’ and firms’ behaviour, it will be shown that the ethicaldiscrimination of firms by banks is implemented by the differentiation of the mark-ups on the loan rate and howthis discrimination leads the system to create different credit markets according to the capacity (or willingness)of firms to satisfy (or not) the ethical claims of the banks.

Suggested Citation

  • Nadia Oliva & Andrea Pacella, 2016. "The Ethics Inside the Monetary Circuit: How Bank’s Social Responsibility Affects Money Creation," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(7), pages 1-1, June.
    • Handle: RePEc:ibn:ijbmjn:v:11:y:2016:i:7:p:1
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    References listed on IDEAS

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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