THE Bank of England (BoE) has recently published two articles in its quarterly bulletin on “Money in the Modern World” and “How Money is Created” (http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf).
The first should be compulsory reading in schools because it is simple and clear explanation of what money is all about. The second is a more technical explanation of how money is created – surprise, surprise – the central bank is not fully responsible! The textbooks tell us that money should have three key attributes – a store of value, unit of account and medium of exchange.
