IDEAS home Printed from https://ideas.repec.org/a/taf/revpoe/v31y2020i4p559-581.html
   My bibliography  Save this article

Money Creation in the Eurozone: An Empirical Assessment of the Endogenous and the Exogenous Money Theories

Author

Listed:
  • Matteo Deleidi
  • Giuseppe Fontana

Abstract

The aim of this paper is to strengthen our understanding of the money creation process in the Eurozone for 1999–2016 period, through an empirical assessment of two main monetary theories, namely the (Post Keynesian) endogenous money theory and the (Monetarist) exogenous money theory. By applying a VAR and VECM methodology, we analyse the causal relationship among monetary reserves (or monetary base), bank deposits and bank loans. Our empirical analysis supports several propositions of the Post Keynesian endogenous money theory since (i) bank loans determine bank deposits, and (ii) bank deposits in turn determine monetary reserves.

Suggested Citation

  • Matteo Deleidi & Giuseppe Fontana, 2020. "Money Creation in the Eurozone: An Empirical Assessment of the Endogenous and the Exogenous Money Theories," Review of Political Economy, Taylor & Francis Journals, vol. 31(4), pages 559-581, July.
    • Handle: RePEc:taf:revpoe:v:31:y:2020:i:4:p:559-581
    DOI: 10.1080/09538259.2020.1737390
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09538259.2020.1737390
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09538259.2020.1737390?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Economou, Fotini & Panagopoulos, Yannis, 2023. "Assessing the credit creation process under the Basel III framework: Some evidence from the Eurozone," Finance Research Letters, Elsevier, vol. 51(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:revpoe:v:31:y:2020:i:4:p:559-581. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRPE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.