Summary and Conclusions
It has been demonstrated that the credit theory proposition that a decrease in the supply of credit causes a decrease in aggregate demand is true only if the decrease in the supply of credit occurred for the purpose of holding additional real money balances. It has also been shown that many of the arguments put forth in favor of the credit theory are neither necessary nor sufficient for it to hold.
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Cover, J.P., Hooks, D.L. Credit versus monetary theories of macroeconomic fluctuations. Atlantic Economic Journal 17, 42–46 (1989). https://doi.org/10.1007/BF02304819
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DOI: https://doi.org/10.1007/BF02304819