tag:blogger.com,1999:blog-2277215496195926573.post326290021688903113..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: Fractional Reserve.Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2277215496195926573.post-35375556320037820092011-11-05T07:49:04.284-07:002011-11-05T07:49:04.284-07:00Sackerson, Yes, GDP is a function of central bank ...Sackerson, Yes, GDP is a function of central bank and private bank created money. But GDP is influenced by other factors as well, like whether a country distorts prices for no good reason. And an artificially high or low rate of interest (leading to too little or too much investment respectively) is an example of an unwarranted distortion.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-2855396283242460722011-11-05T02:30:49.244-07:002011-11-05T02:30:49.244-07:00"Moreover, interest rates were no longer at t..."Moreover, interest rates were no longer at the level at which costs and benefits at the margin were equalised. As a result GDP fell."<br /><br />Could you expand that for me, please? I thought GDP was a reflection of the total transactions in the economy, which in turn was influenced by the stock of money plus Mr Bankfiend's freshly-introduced credit.Sackersonhttps://www.blogger.com/profile/17284329249862764601noreply@blogger.com