A promise to pay what? An open question for credit theories of money

Nicolás Aguila

Cambridge Journal of Economics, 2025, vol. 49, issue 5, 935-953

Abstract: Credit theories of money set themselves apart from other heterodox approaches by arguing that money, the instrument at the top of the monetary hierarchy, is always a form of debt or promise to pay. A promise to pay what? This article reviews and assesses the answers given by credit theories to this question. These are: money is (i) a promise to pay nothing; (ii) a promise to pay something else (goods); (iii) a promise to pay itself; and (iv) a promise to accept, not to pay. The article finds that none of these answers is fully satisfactory as they either fail to justify the nature of money as debt or are logically inconsistent. Thus, a key question for the internal coherence of credit theories remains open.

Keywords: Money; Debt; Credit; Credit theories of money; Monetary hierarchy (search for similar items in EconPapers)
Date: 2025
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