How does your model explain that reserve requirements are now 0%? Why haven’t the banks created infinite money?
The loanable funds model that you describe is no longer accurate (though it is still taught by courses using outdated textbooks, e.g. the classic “Macroeconomics” by Mankiw. Newer textbooks, e.g. Core Econ do not teach the loanable funds model. It is incompatible with empirical data.
The loanable funds model that you describe is no longer accurate (though it is still taught by courses using outdated textbooks, e.g. the classic “Macroeconomics” by Mankiw. Newer textbooks, e.g. Core Econ do not teach the loanable funds model. It is incompatible with empirical data.
[1] https://www.federalreserve.gov/monetarypolicy/reservereq.htm