This chapter introduces the reader to the subject and aim of the book, namely to investigate the economic consequences of financial activity and the financial symptoms of economic change. The success of such an investigation is of utmost importance to understand the connections between the money, capital, and goods markets. Furthermore, it sheds light on the complex relationship between credit and production. The clarification of the term ‘capital’ is an important contribution of this treatment because its ambiguous meanings are pervasive in the banking literature. Most of this literature uses a conception of capital and an economic state based on classical treatments. The growing divergence between the current economic state and the state described by the classics gives rise to a growing danger for practising and theoretical economists. This is particularly visible when looking at the explanations of the business cycle which morph more and more into unquestioned axioms.
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