The Rate of Interest and the New Monetary Theory of Loanable Funds

  • D. Gareth Thomas


The analysis reaches the stage where the new monetary model can be partly built on the endogenous loanable funds supply, which is partially controlled by the commercial banks, and partly with the demand for these funds. This supplements the exogenous assumption that underlies the majority of textbooks underpinning such theoretical models as the IS/LM analysis of macroeconomics. It should be noted, however, that this is going against the grain because a number of textbooks are no longer making any reference to the LM curve.


Loanable funds supply Banks Macroeconomics LM curve Monetary model 

References and Further Reading

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • D. Gareth Thomas
    • 1
  1. 1.Department of Accounting, Finance and EconomicsUniversity of Hertfordshire Business SchoolHatfieldUK

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