Horizontalists, verticalists, and structuralists: The theory of endogenous money reassessed

Thomas Palley

No 121-2013, IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: This paper uses the occasion of the twenty-fifth anniversary of Basil Moore’s book, Horizontalists and Verticalists, to reassess the theory of endogenous money. The paper distinguishes between horizontalists, verticalists, and structuralists. It argues Moore’s horizontalist representation of endogenous money was an over-simplification that discarded important enduring insights from monetary theory. The structuralist approach to endogenous money retains the basic insight that the money supply is credit driven but remedies horizontalism’s omissions and over-simplifications. Twenty-five years later, horizontalism has largely morphed into structuralism. The theoretical challenge going forward is to develop the role of money and finance in a Keynesian theory of output determination. As regards monetary policy, the challenge is how to conduct policy in a world of endogenous money. These concerns emanate naturally from a structuralist perspective on endogenous money.

Keywords: Endogenous money; horizontalists; verticalists; strudturalists; monetarism; bank lending (search for similar items in EconPapers)
JEL-codes: E4 E41 E43 E5 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.boeckler.de/pdf/p_imk_wp_121_2013.pdf (application/pdf)

Related works:
Journal Article: Horizontalists, verticalists, and structuralists: the theory of endogenous money reassessed (2013)
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:imk:wpaper:121-2013

Access Statistics for this paper

More papers in IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Nemitz (sabine-nemitz@boeckler.de).