Horizontalism¶
A post-Keynesian theory of endogenous money in which bank lending creates deposits and central banks accommodate the resulting reserve demand at a policy-controlled interest rate.
Core Idea¶
Horizontalism holds that the central bank sets the short-term reserve price while supplying reserves elastically, so the quantity of money is driven endogenously by credit demand rather than an exogenous reserve stock. Banks extend credit to acceptable borrowers and create deposits; payment and reserve requirements then generate reserve demand that the central bank accommodates to maintain its target rate. The abstraction is therefore identified by a declared carrier, a transformation or constraint over that carrier, and an invariant that tells an analyst whether the named structure is genuinely present.
Scope of Application¶
Horizontalism belongs to monetary economics and is useful where the analyst can specify commercial banks, borrowers and deposits, central-bank reserves, a policy interest rate, reserve demand and supply, creditworthiness, and a monetary operating framework, then evaluate the causal sequence runs loans to deposits to reserves and the central bank controls the reserve price more directly than a fixed quantity under the stated regime. The scope is broad within that domain but bounded by the need for the causal sequence runs loans to deposits to reserves and the central bank controls the reserve price more directly than a fixed quantity under the stated regime. The entry records a descriptive analytical identity; practical use requires the governing domain's evidence, standards, and safety obligations.
Clarity¶
The abstraction clarifies a crowded vocabulary by making the causal sequence runs loans to deposits to reserves and the central bank controls the reserve price more directly than a fixed quantity under the stated regime the center of the account. A claim should name the carrier, the governing operation or relation, the applicable assumptions, and the recognition test. A bare label is insufficient because the name Horizontalism can be used for a formal identity, an implementation, or a neighboring result unless carrier and convention are stated.
Manages Complexity¶
Without the abstraction, an analyst must reason directly over many local details: the carrier roles, admissibility assumptions, competing conventions, derived invariants, boundary cases, and proof or validation obligations specific to Horizontalism. Horizontalism compresses them into the roles in the structural signature. That compression permits comparison across instances without erasing the variables that determine validity. It also exposes which details may be varied safely and which are constitutive.
Abstract Reasoning¶
- Identify the carrier. State what the elements, states, objects, or observations are: commercial banks, borrowers and deposits, central-bank reserves, a policy interest rate, reserve demand and supply, creditworthiness, and a monetary operating framework. Reject examples whose alleged carrier belongs to a different problem. 2. Lock the constitutive rule. Express the causal sequence runs loans to deposits to reserves and the central bank controls the reserve price more directly than a fixed quantity under the stated regime independently of one notation or implementation.
Knowledge Transfer¶
Knowledge transfers strongly among subfields of monetary economics because they reuse commercial banks, borrowers and deposits, central-bank reserves, a policy interest rate, reserve demand and supply, creditworthiness, and a monetary operating framework, Banks extend credit to acceptable borrowers and create deposits; payment and reserve requirements then generate reserve demand that the central bank accommodates to maintain its target rate., and type the carrier, state every parameter and convention in the definition, test that the causal sequence runs loans to deposits to reserves and the central bank controls the reserve price more directly than a fixed quantity under the stated regime, compare the nearest accepted identity, and report counterexamples, uncertainty, and limiting cases.
Relationships to Other Abstractions¶
Current abstraction Horizontalism Domain-specific
Parents (1) — more general patterns this builds on
-
Horizontalism is a kind of Causality Prime
The proposed strict upward parent is
prime:causality.
Hierarchy path (1) — routes to 1 parentless root
- Horizontalism → Causality → Dependency
Neighborhood in Abstraction Space¶
Horizontalism sits in a moderately populated region (44th percentile for distinctiveness): it has near-neighbors but no dense thicket of look-alikes.
Family — Monetary Policy & External Balance (15 abstractions)
Nearest neighbors
- Quantitative easing — 0.91
- Currency crisis — 0.90
- Balance of payments — 0.90
- Monetary conditions index — 0.89
- Credit channel — 0.89
Computed from structural-signature embeddings · 2026-09-08