Endogenous currency and monetary theory of production

Vol. 15 No. 3 (1995)

Jul-Sep / 1995
Published July 1, 1995
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Meirelles, Antonio José. 1995. “Endogenous Currency and Monetary Theory of Production”. Brazilian Journal of Political Economy 15 (3):311-24. https://doi.org/10.1590/0101-31571995-0844.

Endogenous currency and monetary theory of production

Antonio José Meirelles
Doutorando no Instituto de Economia e professor da Faculdade de Engenharia de Alimentos da Universidade de Campinas – UNICAMP, Campinas/SP, Brasil.
Brazilian Journal of Political Economy, Vol. 15 No. 3 (1995), Jul-Sep / 1995, Pages 311-324

Abstract

The aim of this paper is to examine the compatibility of Keynes’ monetary production
theory with the “horizontalist” approach to the determination of the interest rates
and the money supply. According to Moore the short-term interest rates are exogenously
determined by central banks, so that the portfolio approach to its determination, based on
the liquidity preference theory, is incorrect. Keynes’ theory, on the other hand, emphasizes
the nature of money as an asset, whose interest rate, endogenously determined by liquidity
preference, will set the limit to the marginal efficiency of other assets. This essay suggests
that the “horizontalist” approach is not compatible with Keynes’s view on “money as a ‘real’
factor”.

JEL Classification: B50; E12.


Keywords: Money supply interest rate determinantion` post-keynesianism endogenous money