Economists are very familiar with the basic principle: goods flows are matched by monetary flows of identical value – just in the reverse direction of flow. This way of thinking can be traced all the way back to a medical doctor.
The financial crisis has demonstrated and recent empirical research shows that credit growth should not compromise financial stability. If we boost credit demand willy nilly without addressing the large sectoral and aggregate imbalances in the economy that had built up during the credit boom years, we may end up sowing the seeds of another financial crisis.