Endogenous money: the evolutionary versus revolutionary views

Louis-Philippe Rochon and Sergio Rossi
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Sergio Rossi: University of Fribourg

Review of Keynesian Economics, 2013, vol. 1, issue 2, 210-229

Abstract: The purpose of this paper is to shed light on the endogenous nature of money. Contrary to the established post-Keynesian, or evolutionary, view, this paper 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 Chick (1986), this paper 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.

Keywords: banks; endogenous money; monetary analysis (search for similar items in EconPapers)
JEL-codes: E42 E51 E52 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:elg:rokejn:v:1:y:2013:i:2:p210-229

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