The Theory Of The Monetary Circuit

This book provides cutting-edge material elaborating on monetary circuit theory and post-Keynesian monetary economics. It contributes to a new approach to monetary analysis, which provides original insights into the complex fields of money, banking, and finance.

In mainstream economic theory money functions as an instrument for the circulation of commodities or for keeping a stock of liquid wealth. In neither case is it considered fundamental to the production of goods or the distribution of income. Augusto Graziani challenges traditional theories of monetary production, arguing that a modern economy based on credit cannot be understood without a focus on the administration of credit flows. He argues that market asset configuration depends not upon consumer preferences and available technologies but on how money and credit are managed. A strong exponent of the circulation theory of monetary production, Graziani presents an original and perhaps controversial argument that will stimulate debate on the topic.

This second edition explores how money 'works' in the modern economy and synthesises the key principles of Modern Money Theory, exploring macro accounting, currency regimes and exchange rates in both the USA and developing nations.

'This is a timely book. Being on modern theories of money - essentially the study of traditions of endogenous money - it is a welcome contribution to current thinking on monetary policy. The modern central bank view on money is that the rate of interest should be manipulated by central banks to achieve an inflation target with the money supply being the "residual". Although money is in effect endogenous, there is no theory that explains its behaviour. Modern Theories of Money is a serious attempt to sharpen existing views on the issue and fill gaps in an admirable manner.' - Philip Arestis, University of Cambridge, UK and Levy Economics Institute, US This book unites diverse heterodox traditions in the study of endogenous money - which until now have been confined to their own academic quarters - and explores their similarities and differences from both sides of the Atlantic. Bringing together perspectives from post-Keynesians, Circuitists and the Dijon School, the book continues the tradition of Keynes's and Kalecki's analysis of a monetary production economy, emphasising the similarities between the various approaches, and expanding the analytical breadth of the theory of endogenous money. The authors open new avenues for monetary research in order to fuel a renewed interest in the nature and role of money in capitalist economies, which is, the authors argue, one of the most controversial, and therefore fascinating, areas of economics.

This ambitious book presents a comprehensive new 'macro-monetary' interpretation of Marx’s logical method in Capital, based on substantial textual evidence, and concludes that, contrary to the prevailing view, there is no 'transformation problem' in Marx’s theory of prices of production in Volume III.

Provides an original interpretation of the debate on banking and the nature of money in Keynes' time from a post-Keynesian point of view. Realfonzo (economics, U. of Naples) traces the pre- history of monetary circuit theory and its challenge to mainstream analysis in the first four decades of the century, contrasting the neoclassical approach with the monetary theory of production. He examines the contributions of both well-known and relatively neglected authors to the debate on the nature of money and function of the banks. Each chapter concludes with extensive notes. Annotation copyrighted by Book News, Inc., Portland, OR