Monetary Circuit Theory and Money Emissions

Sergio Rossi

Chapter 3 in The Political Economy of Monetary Circuits, 2009, pp 36-55 from Palgrave Macmillan

Abstract: Abstract This chapter focuses on the emission of money and its relation with the working of the banking system in a monetary economy of production and exchange. Referring to the main contributions in this field, this chapter shows that bank money is a macroeconomic flow, while income is a macroeconomic stock in the form of bank deposits. This chapter notably explains that banks can and do issue money but that money’s purchasing power is the result of an integration of banking and production systems, both of which contribute to the creation of value. In particular, this chapter addresses the conceptual and factual distinction between money, credit, and income from a monetary macroeconomics point of view, going back to Keynes’s insights in both A Treatise on Money and The General Theory, and referring to the work of post-Keynesian authors as well as monetary circuit theorists, considered in light of the theory of money emissions (see Rossi, 2006, for a survey of the latter theory).

Keywords: Banking System; Wage Earner; Bank Credit; Bank Deposit; Wage Bill (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-24572-3_3

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DOI: 10.1057/9780230245723_3

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