A Kalecki fable on debt and the monetary transmission mechanism

Jan Toporowski
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Jan Toporowski: School of Oriental and African Studies, University of London, UK

Review of Keynesian Economics, 2016, vol. 4, issue 2, 224-228

Abstract: Kalecki explained debt resolution by means of a fable about monetary circulation between mutually indebted individuals. This note explains the context and some of the theoretical implications of the fable. These point to an asymmetry in monetary policy in which excessively tight monetary policy may restrict economic activity and force the resort to informal debt.

Keywords: Kalecki; Keynes; monetary policy; debt (search for similar items in EconPapers)
JEL-codes: B26 E12 E52 H63 N24 (search for similar items in EconPapers)
Date: 2016
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