The "money multiplier" is a further elaboration of "the velocity of circulation" which was used to attempt to explain why available money could appear to increase or decrease while there was no change in base money. Both versions have been used by various economic textbooks to attempt to educate freshmen over the last half century

Well, yes, the money multiplier mythology is very useful in the context of schooling people in the neoclassical view of banking.

For understanding the how the actual institutions of modern economies... not so much.

So describing them as "arrant nonsense" is a bit flippant and off-putting, even if substantially true, considering that this was what was taught to 90% of everyone who has ever taken ANY economics course.

True. In my defence, when I wrote that I was in the middle of a Macro 202 assignment that was particularly stuffed with other, but similar, forms arrant nonsense. I may have been letting off a little steam that I could not well permit to enter into a liturgical work.

- Jake

Friends come and go. Enemies accumulate.