Money Creation, Employment and Economic Stability: The Monetary Theory of Unemployment and Inflation
AbstractThis paper by building on the general theory of the monetary circuit, proves that money-as a pure bank credit liability-exists to overcome constraints on required expenditures by firms, household and mainly the State. From this perspective the paper derives the employment function in the modern monetary economy. Thereby it is explained that full employment policy is both always possible and required. It is proven that this conclusion holds in a perfectly open economy. Ultimately it is explained that there is no trade-off between full employment and sustainable price stability.
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Bibliographic InfoArticle provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.
Volume (Year): 55 (2008)
Issue (Month): 1 (March)
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Web page: http://www.panoeconomicus.rs/
Money; Banks; Employment; Fiscal policy; Phillips curve; Inflation; Exchange rates; Deficit; Consumption; Investment;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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- Massimo Cingolani & Nadia Garbellini & Ariel Wirkiermann, 2012. "Macroeconomic Developments and Medium-term Outlook for the Western Balkans and Croatia," Book Chapters, Institute of Economic Sciences.
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