Post
Topic
Board Economics
Re: The Labor Theory of Money w/ regards to Microeconomics...
by
hugolp
on 19/06/2011, 16:05:59 UTC
My main doubt is what has the Labor theory of value to do with all this?

There are a couple of things:

The Fed does this in order to control, or manipulate the US money supply and therefore control inflation,

Central banks dont try to control price inflation, one of their tasks is to create price inflation, usually with a target of 2%.

Quote
Traditionally Banks have lended out the money they receive from the Fed,

Its the other way around. Banks lend out the money first, and later on the Fed creates it to cover the banks.