Solving the paradox of monetary profits

Steve Keen

No 2010-2, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Bruun and Heyn-Johnsen (2009) state the paradox that economics has failed to provide a satisfactory explanation of how monetary profits are generated, even though the generation of a physical surplus is an established aspect of non-neoclassical economics. They emphasise that our ability to explain phenomena like the Global Financial Crisis (GFC) will be limited while ever we are still unable to explain this fundamental aspect of capitalism. In fact this paradox can be solved very simply, using insights from what is known as Circuit Theory. In this paper the author shows how monetary profits are generated, and introduces a multisectoral dynamic disequilibrium monetary model of production.

Keywords: Endogenous money; circuit theory (search for similar items in EconPapers)
JEL-codes: E12 E17 E20 E51 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-hpe and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:20102

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