The supply of credit money and capital accumulation: A critical view of Post-Keynesian analysis

Abstract

This chapter critically examines the Post Keynesian horizontalist theory of money from a Marxian perspective. Horizontalist analyses are criticised from three angles. First, monetary theory should be historically specific. Second, credit money is an advanced form of money, created mostly as liabilities of financial institutions, and its supply is endogenous in a more complex and profound sense than Post Keynesian analysis allows. Third, although credit money is endogenous, the quantity supplied is not always compatible with the needs of the sphere of circulation. Consequently, pronounced instability and inflation are possible for purely monetary reasons.

Citation

Lapavitsas, C. and Saad-Filho, A. (2000), "The supply of credit money and capital accumulation: A critical view of Post-Keynesian analysis", Zarembka, P. (Ed.) Value, Capitalist Dynamics and Money (Research in Political Economy, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 309-334. https://doi.org/10.1016/S0161-7230(00)18013-7