The Effect of Money Creation in Increasing Demand and Generating the Economy

Abstract

The purpose of this study is to study the effect of the creation of money in increasing demand and generating economy. Qualitative methods by collecting previous literature review are used to find out the relation between money creations and give effect towards economy. This study provides empirical evidence that money creation can be increase the demand and stimulate or generate the economy. This article explores about money creation that will give effect towards economy. The articles begins by outlining about money creation, highlight the current issues, money creation from banking perspective and money creation from economic perspective. The article then discusses the limits to the banking system’s ability to create money and the important role for central bank policies in ensuring that credit and money growth are consistent with monetary and financial stability in the economy. The final section discusses the effect of money creations towards economic performance. And finally, the article ends with conclusion parts.