The question of who creates more money is a complex one, as there are different perspectives on the creation of money.
Central Banks and Money Creation
Central banks, such as the Federal Reserve in the United States, play a significant role in money creation. They create new money through a process called quantitative easing, where they purchase government bonds or other assets, injecting new funds into the economy.
Commercial Banks and Money Creation
Commercial banks also create money through the process of fractional reserve banking. This involves lending out a portion of the deposits they receive, which then circulates in the economy as new money.
Government Spending and Money Creation
Governments can also create money by spending more than they collect in taxes, leading to budget deficits. This spending can stimulate economic activity and increase the money supply.
Conclusion
Ultimately, the question of who creates more money is not easily answered. Both central banks, commercial banks, and governments play a role in the creation of money. However, it's important to note that these entities do not create money out of thin air. They create money by increasing the supply of existing assets, such as government bonds or bank deposits.
