Browse by title

You are looking at 41 - 50 of 1,959 items :

  • Post-Keynesian Economics x
Clear All
This content is available to you

Edited by Louis-Philippe Rochon and Sergio Rossi

You do not have access to this content

Edited by Louis-Philippe Rochon and Sergio Rossi

The endogenous nature of money is a fact that has been recognized rather late in monetary economics. Today, it is explained most comprehensively by the theory of money in post-Keynesian monetary theory. The expert contributors to this enlightening book revisit long-standing debates on the endogeneity of money from the position of both horizontalists and structuralists, and prescribe new areas of research and debate for post-Keynesian scholars to explore.
You do not have access to this content

Peter Docherty

This chapter argues that locating the main points at issue in the horizontalist–structuralist debate within a well-articulated framework that takes careful account of the analytical role of endogenous money highlights the potential for greater complementarity of and consistency between the two perspectives. The approach is to outline an essentially horizontalist theory of long-run unemployment but to show how key dimensions of structuralism are consistent with this theory on a number of points.

You do not have access to this content

Marc Lavoie

This chapter presents the principles of the stock–flow consistent framework put forth by Wynne Godley. It offers an illustration of this framework using a simple growth model without government debt but with private money. It then presents some results achieved by running simulations with this model, to enlighten the controversies that have arisen around Minsky’s financial instability hypothesis.

You do not have access to this content

Malcolm Sawyer

The terminology of demand and supply is highly misleading in the context of money and both terms have been applied in quite inappropriate ways. The attention paid to the supply-of-money curve in the horizontalist and structuralist debates has distracted from the analysis of the key elements of endogenous money, including how money is created and destroyed. Furthermore, any observed relationship between interest rates and the volume of loans and of money does not represent a supply-of-loans relationship, and a search for some general relationship between the volume of loans and the rate of interest is misplaced.

You do not have access to this content

Mark Setterfield

This chapter views the debate between horizontalism and structuralism through the lens of the ‘history versus equilibrium’ distinction in post-Keynesian macrodynamics. The argument is that that there can be, and to an extent already is, agreement that the horizontal credit-supply curve is not a special case, and that the existence of an indeterminate dynamic credit-supply schedule provides a general framework capable of accommodating both horizontalist and structuralist arguments. These claims rest on the distinction between logical and historical time and, in particular, the claim that any construct (including, for example, a credit-supply schedule) that is akin to a determinate long-run equilibrium relationship is anathema to the methodological foundations of post-Keynesian economics.

You do not have access to this content

Christopher J. Niggle

The purpose of this chapter is to investigate the role of the endogenous money theory in the development of evolutionary post-Keynesian macroeconomics, in which money and the process of money creation are both analysed as evolving institutions. The chapter discusses the revival of the endogenous-money theory as a part of the post-Keynesian critique of both monetarism and the neoclassical-synthesis version of Keynesianism (Joan Robinson’s ‘bastard Keynesianism’). It further discusses some controversies and debates regarding the theory within the evolutionary post-Keynesian literature, including the horizontalist–structuralist debates. This analysis considers the institutions that influence the degree of money supply.

You do not have access to this content

Louis-Philippe Rochon and Sergio Rossi

This chapter sheds light on the endogenous nature of money. Contrary to the established post-Keynesian, or evolutionary, view, the chapter argues that money has always been endogenous, irrespective of the historical period. Instead of the evolutionary theory of money and banking that can be traced back to Victoria Chick’s 1986 paper, this chapter puts forward a revolutionary definition of endogenous money consistent with many aspects of post-Keynesian economics as well as with the monetary circuit approach. This alternative starting point leads to the conclusion that money is indeed ‘always and everywhere’ an endogenous phenomenon. This analysis rests on the nature of debt, the essential role of a settlement institution, and the link between production, money and income.

You do not have access to this content

Paul Dalziel

New Zealand was the first country in modern times to adopt a formal inflation target, introduced as part of its monetary disinflationary programme in the late 1980s. Initially the Reserve Bank of New Zealand implemented monetary policy through targeting the monetary base before shifting to targeting the banking system’s base interest rate in 1999. During this period, the author was contributing to the horizontalist debate in the post-Keynesian literature sparked by Basil Moore’s 1988 book. This chapter brings together Dalziel’s theoretical contributions and New Zealand’s policy experience to show how post-Keynesian monetary theory remains highly relevant for current policy debates.

You do not have access to this content

John Smithin

The debate between the horizontalist and structuralist wings of the post-Keynesian school was about the need to reconcile the notions of endogenous money, central-bank interest-rate operating procedures, and the intuitive idea, from Keynes, that liquidity preference also matters for the determination of interest rates. This chapter argues that all of these things are entirely compatible. However, it is important to recognize that the most important point at issue is about the determination of real interest rates, not just nominal interest rates. If the central bank can target the real policy rate of interest, then it will certainly also have much influence over the real interest rates actually paid by borrowers, including firms making investments.