Macario Schettino has a different approach. He believes that a crucial influence on macroeconomic outcomes comes from the central bank balance sheet and, specifically, from “the monetary base”. The monetary base contains notes and coin held by the general public, and – in the US case – banks’ cash reserves at the Federal Reserve. I totally reject this view. Yes, non-bank agents do use notes and coin for some of their transactions, but nowadays their value is less than 1 per cent of total transactions. Of course, cash reserves are held by banks, not by non-banks, and I have just explained why I am not interested in them. Banks’ own purchases of goods and services are tiny – perhaps 2 per cent – of aggregate demand.