The Role of credit in a Keynesian monetary economy
This paper describes the features of a monetary economy on the basis of Keynes's distinction between a real exchange economy and a monetary economy. In The General Theory, Keynes identifies the reasons for the non-neutrality of money by highlighting the store of wealth function of money; this approach has been adopted by most Keynesian economists. The aim of this paper is to show that such an approach only partially explains the reasons for money non-neutrality and that important elements which demonstrate the relevance of monetary variables emerge when the means of payment function of money is considered. Investigating the role of this function requires that we deal explicitly with how spending decisions are financed. The paper argues that the market for credit must be considered separately from the market for money, and that a viable credit theory can be built from Keynes's post-General Theory writings.
Year of publication: |
2005
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Authors: | Bertocco, Giancarlo |
Published in: |
Review of Political Economy. - Taylor & Francis Journals, ISSN 0953-8259. - Vol. 17.2005, 4, p. 489-511
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Publisher: |
Taylor & Francis Journals |
Saved in:
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