John Law, born in Edinburgh, the son of a goldsmith and banker, recognized the implications of the activities of banks and their link to the economy. He argued that wealth depends on goods and their trade ‘and Trade depends on Money’. ‘But only banker-created money ensures a sufficiently active supply’ (Davies, 1994, p. 553, paraphrasing Law). ‘By this Money the People may be employed, the Country improved, Manufacture advanced, Trade Domestic and Foreign be carried on, and Wealth and Power attained’ (quoted in Davies, 1994, p. 553).
KeywordsInterest Rate Central Bank Total Factor Productivity Foreign Investment Purchasing Power
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