Date: Sun, 23 Jul 1995 14:44:57 -0400 (EDT) From: Roderick Hay <[log in to unmask]> Subject: Re: Proof in the History of Economics To: [log in to unmask] Cc: [log in to unmask] Reply-to: [log in to unmask] Surely the question is quite simple, despite the length of the posts on this topic. Can the banks (or governments) motivate people to use resources productively, that would not otherwise be used? If so then further productivity and growth rates will be higher. If not then there may be some misallocation of resources, causing lower future growth rates. The rest of the twaddle is irrelevant. Rod The question should be different in the accent if we accept that banks "cannot increase or reduce their loan portfolios at their initiative" (Moore Basil, 1988); in other words bank loans are made primarily at the initiative of the borrower, especially where the credit lines have been previously negotiated. Giuseppe