[OPE-L:3341] Re: Value of Money

Steve Keen (s.keen@uws.edu.au)
Thu, 10 Oct 1996 14:22:46 -0700 (PDT)

[ show plain text ]

Gerald Levy wrote:
> Please explain the assertion above regarding the relative development of
> PK vs. Marxian theories of money -- noting that there are both
> commodity-money and credit-money Marxian theories.
> Please be so kind, also, to give *examples* of PK literature on money
> which is significantly more developed than that existing in Marxian
> literature.

OK, but with the proviso that I know PK theories, and Marx's writings,
better than I know Marxian writings on the subject.

The defining features of PK literature on the subject are (a) that the
treatment is exclusively of credit money and (b) that money is treated
as endogenous.

My favourite is undoubtedly Minsky with his Financial Instability
Hypothesis. The most accessible reference here is his collected papers
volume, _Can "It" Happen Again?_ (sold outside the USA as _Inflation,
Recession & Economic Policy_ (ME Sharpe, Armonk 1982/Wheatsheaf). The
most comprehensive is _John Maynard Keynes_ (not a biography!), Columbia
Uni Press, 1975.

The best explanation as to why the money supply is endogenous--and hence
why the "quantity theory of money" relation works backwards, from
prices/transactions to the monetary base (gold + notes issues)--is in
Basil Moore, "The endogeneity of credit money", Review of Political
Economy, Vol 1 No. 1, 65-93.