Production Structures and Fluctuations in the Money Supply: An Analysis Based on Marx’s Concept of Set-Free Money Capital

Junshang Liang and Chengwei Tang

Review of Radical Political Economics, 2024, vol. 56, issue 4, 476-486

Abstract: In chapter 15 of volume 2 of Capital , Marx introduced the concept of set-free money capital during the turnover process of industrial capital, positing its role in the credit system. Saros further formalized this process, suggesting that set-free money capital could serve as loanable funds, impacting the credit system. This article advances this research by making three significant contributions. Firstly, it offers a more succinct formalization of the turnover process, improving pedagogical clarity. Secondly, it reinterprets the significance of set-free money capital within the modern credit money system using post-Keynesian endogenous money theory, linking production directly to the money supply. Lastly, it demonstrates through simulations that production structure influences the periodic fluctuations of set-free money capital at the macro level, affecting the money supply. JEL Classification : B51, E32, E51

Keywords: Production structure; money supply; endogenous money; fluctuation and cycle (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:56:y:2024:i:4:p:476-486

DOI: 10.1177/04866134241270661

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