Examining modern money creation: An institution-centered explanation and visualization of the “credit theory” of money and some reflections on its significance

Figures & data

Figure 1. An Institutional Representation of the Money Creation Process.

Source: Author.

Figure 2. UK Money Supply, 1950–2021: Broad Money (M4) and Base Money (M0).

Source: Federal Reserve. https://fred.stlouisfed.org/series/MBM0UKM

Figure 3. A Practical Illustration of How Money is Created as Debt.

Source: Author.

Figure 4. A Representation of the Relationship Between the Bankmoney and Central Bank Reserve Circuits.

Source: Adapted by Author from Ryan-Collins et al. (2012).

Figure 5. A Representation of the “Canceling Out” of Transfers of Money Between Different Banks.

Source: Adapted by Author from Ryan-Collins et al. (2012).

Figure 6. A Representation of the Interbank Clearing Process.

Source: Ryan-Collins et al. (2012).

Figure 7. Broad Money (M4) and GDP in the UK, 1970–2021. Source: Federal Reserve. https://fred.stlouisfed.org/series/MBM0UKM

Ryan-Collins, J., T. Greenham, R. Werner, and A. Jackson. 2012. Where does money come from? London: New Economics Foundation.

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