Growth and income distribution in a credit-money economy

Introducing the banking sector into the linear production model

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

This paper attempts to incorporate the Post-Keynesian view of the endogenous money supply into the Sraffian linear production model. The framework presented here unifies some key contributions made by Sraffa (the price equations), Kaldor and Kalecki (the endogenous nature of money in the industrial economy and the framework of the institutional theory of income distribution) and Keynes (liquidity preference and the concept of the 'own rates of interest' with its implication for the long-period position). Two different positions in the endogeneity view-the 'accommodationist' and the 'structuralist'-are classified in terms of method of selecting exogenous and endogenous variables. In this way, we hope to show that credit and money can play an essential role-from the demand and/or the supply side-by having a permanent impact on the growth path and the state of income distribution of an economy.

Original languageEnglish
Pages (from-to)585-612
Number of pages28
JournalCambridge Journal of Economics
Volume26
Issue number5
Publication statusPublished - 2002 Sep 1

Fingerprint

Distribution of income
Income distribution
Credit
Banking sector
Kaldor
Kalecki
Endogenous variables
Sraffa
Liquidity preference
Endogeneity
Supply side
Exogenous variables
Endogenous money
Money supply
Institutional theory
Long period
John Maynard Keynes
Post Keynesian

Keywords

  • Credit money
  • Endogenous money
  • Linear production model

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

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