BANKARSKI DEPOZITI, POZAJMICE I PRERASPODJELA BOGATSTVA NA PRIMJERU JEDNOG VEĆ USVOJENOG TEORIJSKOG STAVA
BANK DEPOSITS, LOANS AND REDISTRIBUTION OF WEALTH IN THE CASE OF AN ALREADY ADOPTED THEORETICAL OPINION

Summary/Abstract: Money creation with fractional reserve banking is an already accepted theoretical position, designated as an operation after that the society is not richer but the economy is more liquid, because there is more money in circulation. Banks, by lending a portion of their deposits cause a process of creating of new deposits and thus increase the total money supply. Money, by definition, is a means for the exchange of goods and services, but after analysing the creation of money in the process of monetary multiplication, the question arises to which consequences this concept will lead. Therefore the theory of the money multiplier will be analysed in detail from the aspect of money demand, management of money supply and possible redistribution of wealth due to the existence of additional deposits.

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