The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM
Autor(a) principal: | |
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Data de Publicação: | 2017 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Revista de Economia Política |
Texto Completo: | http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572017000100003 |
Resumo: | ABSTRACT Money is at the center of macroeconomics, which makes understanding the money supply central for macroeconomic theory. This paper presents the Post Keynesian theory of endogenous money supply and shows how it is fundamentally different from the conventional money supply theory. The conventional approach relies on the money multiplier and bank lending is invisible. Post Keynesian theory discards the money multiplier and focuses on bank lending which drives money creation. The paper emphasizes the structuralist version of Post Keynesian theory which retains Keynes’ liquidity preference theory of long term interest rates and also recognizes banks are subject to financial constraints that limit their lending activities. The paper then shows how to derive the LM schedule in an endogenous money economy, which is a necessary prelude to reconstructing the ISLM model. |
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The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLMendogenous moneystructuralismhorizontalismLM scheduleISLM modelABSTRACT Money is at the center of macroeconomics, which makes understanding the money supply central for macroeconomic theory. This paper presents the Post Keynesian theory of endogenous money supply and shows how it is fundamentally different from the conventional money supply theory. The conventional approach relies on the money multiplier and bank lending is invisible. Post Keynesian theory discards the money multiplier and focuses on bank lending which drives money creation. The paper emphasizes the structuralist version of Post Keynesian theory which retains Keynes’ liquidity preference theory of long term interest rates and also recognizes banks are subject to financial constraints that limit their lending activities. The paper then shows how to derive the LM schedule in an endogenous money economy, which is a necessary prelude to reconstructing the ISLM model.Centro de Economia Política2017-03-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572017000100003Brazilian Journal of Political Economy v.37 n.1 2017reponame:Revista de Economia Políticainstname:EDITORA 34instacron:EDITORA_3410.1590/0101-31572016v37n01a01info:eu-repo/semantics/openAccessPALLEY,THOMAS I.eng2017-03-07T00:00:00Zoai:scielo:S0101-31572017000100003Revistahttps://centrodeeconomiapolitica.org.br/repojs/index.php/journalONGhttps://centrodeeconomiapolitica.org.br/repojs/index.php/journal/oai||cecilia.heise@bjpe.org.br1809-45380101-3157opendoar:2017-03-07T00:00Revista de Economia Política - EDITORA 34false |
dc.title.none.fl_str_mv |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM |
title |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM |
spellingShingle |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM PALLEY,THOMAS I. endogenous money structuralism horizontalism LM schedule ISLM model |
title_short |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM |
title_full |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM |
title_fullStr |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM |
title_full_unstemmed |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM |
title_sort |
The theory of endogenous money and the LM schedule: prelude to a reconstruction of ISLM |
author |
PALLEY,THOMAS I. |
author_facet |
PALLEY,THOMAS I. |
author_role |
author |
dc.contributor.author.fl_str_mv |
PALLEY,THOMAS I. |
dc.subject.por.fl_str_mv |
endogenous money structuralism horizontalism LM schedule ISLM model |
topic |
endogenous money structuralism horizontalism LM schedule ISLM model |
description |
ABSTRACT Money is at the center of macroeconomics, which makes understanding the money supply central for macroeconomic theory. This paper presents the Post Keynesian theory of endogenous money supply and shows how it is fundamentally different from the conventional money supply theory. The conventional approach relies on the money multiplier and bank lending is invisible. Post Keynesian theory discards the money multiplier and focuses on bank lending which drives money creation. The paper emphasizes the structuralist version of Post Keynesian theory which retains Keynes’ liquidity preference theory of long term interest rates and also recognizes banks are subject to financial constraints that limit their lending activities. The paper then shows how to derive the LM schedule in an endogenous money economy, which is a necessary prelude to reconstructing the ISLM model. |
publishDate |
2017 |
dc.date.none.fl_str_mv |
2017-03-01 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572017000100003 |
url |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572017000100003 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
10.1590/0101-31572016v37n01a01 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
text/html |
dc.publisher.none.fl_str_mv |
Centro de Economia Política |
publisher.none.fl_str_mv |
Centro de Economia Política |
dc.source.none.fl_str_mv |
Brazilian Journal of Political Economy v.37 n.1 2017 reponame:Revista de Economia Política instname:EDITORA 34 instacron:EDITORA_34 |
instname_str |
EDITORA 34 |
instacron_str |
EDITORA_34 |
institution |
EDITORA_34 |
reponame_str |
Revista de Economia Política |
collection |
Revista de Economia Política |
repository.name.fl_str_mv |
Revista de Economia Política - EDITORA 34 |
repository.mail.fl_str_mv |
||cecilia.heise@bjpe.org.br |
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1754122481808965632 |