So banks create money through loan creation, that is now commonly agreed upon by at least most people on this list. My question is this; does the stock market create money through IPO's? So for example I am a company looking to make heavy investments in plant and equipment, and I fund that through an IPO, is the process of money creation the same as the process of loan money creation done in a bank system?
I understand the premise that anything can be money based upon how acceptable it is in exchange, but is there a fundamental difference between and IPO and bank created loans?
Also are there papers on this out there?
Thanks in advance to all who will pipe in.
Timothy A Wunder PhD
Clinical Associate Professor
Graduate Student Advisor
Department of Economics University of Texas at Arlington
817.272.3257
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