endogenous money

Endogenous money refers to the idea that the supply of money in an economy is determined internally by the banking system and economic activity, rather than being controlled solely by the central bank. When businesses and consumers borrow and spend, banks create new money through loans, which increases the money supply based on demand. Central banks influence interest rates, but the actual amount of money available is primarily driven by borrowing needs and lending behaviors within the economy. This view contrasts with the traditional notion that central banks directly control the total money supply.