Where does money come from? How does an economy keep getting more money – what is the origin?

Question

Where does money come from? How does an economy keep getting more money – what is the origin?

In: Economics

Answer 1

Banks create money through loans. And to be clear, it has nothing to do with the federal reserve or fractional reserves. There are regulations in place to meter the banks, so they don’t game the system, like what happened leading to the 2008 crash. Banks have to be profitable, meaning they have to bring in revenue – they can’t just make their own loans and pay themselves.