If customers have confidence in a banker's promissory notes (his paper money), he will then be able to lend out more in paper than he keeps in reserve in gold to cover his withdrawals. Today, we call this "fractional reserve banking." Yet Smith, like Hume, sees money as being unable to affect real variables in the long run, so simply adding paper money to the economy will not lead to growth.

Mark Blyth, Austerity, loc. 294