Credit, Money, and Production: An Alternative Post-Keynesian Approach

360 Pages·1999·6.307 MB·English

by  Louis-Philippe Rochon

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Post-Keynesl'an Appro I ;M‘.L
Credit, Money and
Production
This thought-provokingbook clearly and
systematically analyzes the post-Keyne-
sian approaches to endogenous money
and, in doing so, provides an informed
critique ofthe development of post-
Keynesian economics.
Using a horizontalist perspective the
author offers an historical overview of the
post-Keynesian and circuit approaches to
endogenous money, starting with a
comprehensive survey ofthe Franco-
Italian circuit school. He argues that rather
than emphasizing the early writings of
Minsky, Kaldor and Tobin in the 1950s,
and of Davidson and Rousseas later, post-
Keynesians ought to have followed the
writings of Joan Robinson and Richard
Kahn who offered far bettertheories of
credit-money. The author then compares
the current post-Keynesian structuralist
theory with New Keynesian monetary
thought. In conclusion, he develops an
innovative theory of banking based on
Keynesian uncertainty and consistent
with the horizontalist tradition taking into
account credit restraints, crunches and
creditworthiness. 4
This book will be illuminating to scholars
of post-Keynesian economics, macro-
economics, and history of economic
thought.

Credit, Money and Production

Credit, Money and
Production
An Alternative Post-Keynesian Approach
Louis-Philippe Rochon
Stephen B. MonroeAssistant Professor
ofEconomics andBanking
Kalamazoo College, Michigan
Edward Elgar
Chelte ham UK Northampto MA USA
lllllljllllllllllllllllllllllllllllllllll
This One
© Louis-Philippe Rochon, I999.
All rights reserved. No part ofthis publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means, electronic,
mechanical or photocopying, recording, or otherwise without the prior
permission of the publisher.
Published by
Edward ElgarPublishingLimited
Glensanda House
Montpellier Parade
Cheltenham
GlosGL50 IUA
UK
Edward Elgar Publishing, Inc.
I36 West Street
Suite 202
Northampton
Massachusetts 01060
USA
A catalogue record forthis book
is available from the British Library
Library of Congress Cataloguing in Publication Data
Rochon, Louis-Philippe.
Credit, money, and production: an altemative post-Keynesian
approach / Louis-Philippe Rochon, Stephen B. Monroe.
l. Money. 2. Credit. 3. Keynesian economics. I. Monroe,
Stephen B. ll. Title.
HG22l.R637 I999
332.4-—dc2I 99-27516
CIP
ISBN 1 85898 895 0
Printedandbound in GreatBritain byBookcraft (Bath) Ltd.
Contents
ListofFigures
Preface
Acknowledgements
Introduction
TheFranco-ItalianCircuitists: Credit,MoneyandProduction
Credit, MoneyandPost-KeynesianTheory: Clarifications
ofFamiliarThemes
The EarlyViewsof“Endogenous”Money: Minsky, Kaldor
andTobin
The EarlyViewsof“Endogenous”MoneyRevisited:
DavidsonandRousseasversusRobinsonandKahn
Horizontalistsand Structuralists: CreditandEndogenous
“Money”
Post-KeynesiansandOrthodoxy: “Neo” Post-Keynesians?
New KeynesianMonetaryTheoryandtheTransmission
Mechanism: A ComparisonwithPost-KeynesianTheory
A Post-Keynesian/CircuitistTheoryofBanks:
Uncertainty, Creditworthiness, andthe SupplyofCredit
Bibliography
ndex
V
Figures
1.1 Thecirculationofmoney in aproductioneconomy
3.1 Minsky's interest rate/ velocity theorem
5.1 The horizontal creditsupplycurve
5.2 Horizontalism and achange in monetary policy
5.3 Minsky's two-pricediagram
5.4 Kalecki’s static principleofincreasing risk
5.5 Thedynamic two-priceMinsky diagram
7.1 The New Keynesian credit rationing model
vi