Inadequacy of revenues and endogenous economic cycles in a monetary economy of production

Edouard Cottin-Euziol () and Nicolas Piluso ()
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Edouard Cottin-Euziol: LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles
Nicolas Piluso: CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT3 - Université Toulouse III - Paul Sabatier - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique, Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IUT Toulouse Auch Castres - Institut Universitaire de Technologie - Paul Sabatier - UT3 - Université Toulouse III - Paul Sabatier - Comue de Toulouse - Communauté d'universités et établissements de Toulouse

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Abstract: The recurring cycles of economic activity in a capitalist economy have prompted a variety of explanations. Some of these focus on the excessive indebtedness of economic agents during a growth phase, which may result from overly optimistic behavior or excessive risk-taking. From a post-Keynesian circuit theory perspective, this article shows that this excess debt could also result from firms' current production expenditures generating insufficient income to enable them to purchase production. In this case, society must go into debt to consume what it produces, creating ever-increasing debt. This situation tends to be reversed during a depression. Based on these assumptions, endogenous cycles of economic activity can be modeled within the framework of a monetary economy of production.

Keywords: Business cycles; Monetary economy of production; Monetary circuit theory; Endogenous money; Bank money; Paradox of profit (search for similar items in EconPapers)
Date: 2026-05-01
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Published in European Journal of Economics and Economic Policies: Intervention, 2026, 23 (1), pp.82-99. ⟨10.4337/ejeep.2026.01.05⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05635254

DOI: 10.4337/ejeep.2026.01.05

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