Theoretical Reflections on Endogenous Money: The Problem with 'Convenience Lending.'

Philip Arestis and Peter Howells ()

Cambridge Journal of Economics, 1996, vol. 20, issue 5, pages 539-51

Abstract: This paper questions the practice of representing the endogenous money supply by means of a 'horizontal' money supply curve, implicitly contrasted with the conventional 'vertical' (stock) supply curve. What is drawn as a horizontal curve is strictly a locus between a continually shifting stock curve and a shifting demand curve. Consequently, demand (for money) considerations have been suppressed in the 'horizontal' presentation. One response is that the resulting deposits are automatically held, through some process such as 'convenience lending'. However, the argument behind 'convenience lending' points to the conclusion that it is changes in relative interest rates that reconcile the demand for additional loans with the demand for additional deposits. (c) 1996 Academic Press Limited Copyright 1996 by Oxford University Press.

Date: 1996
References: Add references at CitEc
Citations View citations in EconPapers (20) Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:oup:cambje:v:20:y:1996:i:5:p:539-51

Ordering information: This journal article can be ordered from
http://www.oup.co.uk/journals

Access Statistics for this article

Cambridge Journal of Economics is edited by Jacqui Lagrue

More articles in Cambridge Journal of Economics from Oxford University Press
Address: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Series data maintained by Oxford University Press ().