On the Monetary Nature of the Principle of Effective Demand

Giancarlo Bertocco and Andrea Kalajzić

International Journal of Political Economy, 2020, vol. 49, issue 1, 1-22

Abstract: Since the publication of The General Theory the relationship between money and the principle of effective demand has been a matter of never-ending studies by the Keynesian economists. There are at least three different ways to explain this relationship. The first explanation lies in the liquidity preference theory. The second, points out that the decisions to accumulate a kind of money differing from a commodity obtained by labor may cause a level of aggregate demand insufficient to absorb the level of income corresponding to full employment. Finally, the third explanation is associated with the endogenous money theory. The first aim of this paper is to highlight the limits of these analyses. The second aim is to present a different explanation of the monetary nature of the principle of effective demand based on Schumpeter’s analytical approach which underlines the role of bank money in a capitalist economy.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/08911916.2020.1733775 (text/html)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:mes:ijpoec:v:49:y:2020:i:1:p:1-22

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MIJP20

DOI: 10.1080/08911916.2020.1733775

Access Statistics for this article

More articles in International Journal of Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().