The name is absent

Detrended multiplier

Figure 6: Empirical disribution of the detrended money multiplier. The dashed-
dotted line indicates the best fit for a power-law.

the multiplier seems rather weak so far, though we believe that a more careful
analysis is required. In particular, it has to be identified the measure that
better captures the avalanche style behaviour of the system, since the multiplier,
suffering from the limitations described above, might be a poor indicator of such
a behaviour.

3 Conclusions

This paper is a tentative contribution in the field of monetary economics and
offers a representation of the money creation process in a credit economy that
is alternative to the standard one provided by the static multiplier. We have
focused our attention on the mechanics of the process, and we have shown
the importance of the role played by the heterogeneity of the actors involved
and their interactions. An important feature that has been shown here is the
path dependence of the system, which implies that position and timing of CB’s
interventions on the money market will have an impact on their effectiveness.
Finally, the structure of the monetary system has been shown to affect the
variability of the multiplier and therefore the process of money creation. It
is therefore important that some effort be devoted in order to understand the
empirical structure of monetary and credit transactions.

The approach we have adopted in this work, we believe, is well suited for
supporting a theory of endogenous money, as it does not imply a deterministic
and causal relationship between the monetary base and the quantity of money.
Emphasis is placed on the monetary and credit transactions, and though we did
not try to link these transactions to the economic activity, the two aspects are
clearly interrelated.

Our analysis is just an initial step and much road has still to be covered in

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