Horizontalism
Horizontalism is an approach to
Basil Moore which states that private bank reserves are not managed by central banks. Instead reserves will be provided on demand at the bank rate set by the central bank. This inverts the mainstream textbook money multiplier
relationship between deposits and loans since loans are said to cause deposits which in turn cause reserves.
Horizontalism influenced
leverage ratio
, i.e. horizontal leveraging.
Further reading
- Moore, Basil (1988). Horizontalists and Verticalists: The Macroeconomics of Credit Money, Cambridge University Press. ISBN 0-521-35079-4
- Palley, Thomas (2013). "Horizontalists, verticalists, and structuralists: The theory of endogenous money reassessed" (PDF). Retrieved 16 March 2015.
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