Bank credit and the labour market in a Keynesian theoretical perspective

Guglielmo Forges Davanzati and Andrea Pacella

No 10_2013, STOREPapers from Associazione Italiana per la Storia dell'Economia Politica - StorEP

Abstract: The idea that the banking system creates money ex nihilo, so that “loans make deposits”, can be regarded as a key concept of Keynes’s theory of money and banking, and it is a cornerstone of the contemporary monetary theory of production. Starting from this assumption, this paper aims at providing a critical reconstruction of Keynes’s view on the links existing between public expenditure, interest rate, wages and employment. The paper will mainly focus on Keynes’s Treatise on Money, on the basis of a “continuist” interpretation of Keynes’s thought.

Keywords: endogenous money; bank credit; income distribution (search for similar items in EconPapers)
JEL-codes: B22 D33 E12 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2013-01
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