Wilhelm Lautenbach’s credit mechanics – a precursor to the current money supply debate

Abstract

This article assesses the theory of credit mechanics within the context of the current money supply debate. Credit mechanics and related approaches were developed by a group of German monetary economists during the 1920s-1960s. Credit mechanics overcomes a one-sided, bank-centric view of money creation, which is often encountered in monetary theory. We show that the money supply is influenced by the interplay of loan creation and repayment rates; the relative share of credit volume neutral debtor-to-debtor and creditor-to-creditor payments; the availability of loan security; and the behavior of non-banks and nonborrowing bank creditors. With the standard textbook models of money creation now discredited, we argue that a more general approach to money supply theory involving credit mechanics needs to be re-established.

A stagflation-proof bill of exchange circulation model – Presentation and evaluation

“…10%-os értékvesztése már veszélyeztetheti a tőkemegfelelést 5 . A (jelenlegi jogszabályok értelmében tiltott -a Szerzők megjegyzése) közvetlen hitelnyújtás 6 nem fenyegetné a bankrendszert a fenti értelemben, akkor sem, ha kizárólag belföldi forgalomban használt váltókkal, állami elfogadványokkal finanszíroznák az állami kiadásokat. Ez utóbbi megállapításunk visszavezet bennünket a kiindulásként bemutatott hitelmechanizmus elmélethez.…”