By Govert Schuller.
A group of economics students have published an open letter to their professors challenging the fact that their textbooks are flawed when it comes to describing the way banks work. The group calls itself Pluralism in Economics (PINE) and was formed at the University College Maastricht in the Netherlands.
The opening paragraph clearly spells out their issue:
Dear Economics Professors,
We are a student-driven initiative at Maastricht University that is eager to improve the economics curriculum. With this open letter, we want to raise your awareness that what is currently taught in economics at UM on how banks work and how money is created is contrary to existing evidence and does not fit with the high-quality education that UM offers. Professors and textbooks at UM teach the mainstream but faulty view of “loanable funds” and “money multiplier”, even though central banks and commercial banks openly admit that those concepts are misleading.