IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/119866.html
   My bibliography  Save this paper

The Contributions of Knapp and Innes to the Chartalist Theory of Money

Author

Listed:
  • Guidorzzi Girotto, Vitor
  • Strachman, Eduardo

Abstract

The relationship between money and credit is analyzed differently between schools of economic thought. Orthodoxy, in general, analyzes it using the commodity money approach; heterodoxy, in large part, adopts the Chartist approach. The crucial difference between them lies in the fact, as put by Schumpeter, that orthodoxy postulates a monetary theory of credit; the heterodox, a credit theory of money. For the latter, money is, by nature, credit, and it can take different forms, tangible or not. The State uses it sovereignty to delimit the monetary system by defining what will (or will not) be accepted as money in the payments of transactions due to itself. Thus, Knapp’s contribution in structuring a theory of state money meets Innes’s credit theory of money and, together, these contributions offer a solid theoretical and historical framework for the formulation of an alternative theory of money, the Chartist theory.

Suggested Citation

  • Guidorzzi Girotto, Vitor & Strachman, Eduardo, 2024. "The Contributions of Knapp and Innes to the Chartalist Theory of Money," MPRA Paper 119866, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:119866
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/119866/1/MPRA_paper_119866.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Knapp, Georg Friedrich, 1924. "The State Theory of Money," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number knapp1924.
    2. Marc Lavoie, 2009. "Introduction to Post-Keynesian Economics," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-23548-9.
    3. David Dequech, 2013. "Is money a convention and/or a creature of the state? the convention of acceptability, the state, contracts, and taxes," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 36(2), pages 251-274.
    4. Dimitri B. Papadimitriou & L. Randall Wray, 2010. "Introduction: Minsky on Money, Banking and Finance," Chapters, in: Dimitri B. Papadimitriou & L. Randall Wray (ed.), The Elgar Companion to Hyman Minsky, chapter 1, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bill Lucarelli, 2011. "The Economics of Financial Turbulence," Books, Edward Elgar Publishing, number 14252.
    2. Aloys L. Prinz & Hanno Beck, 2021. "Modern Monetary Theory: A Solid Theoretical Foundation of Economic Policy?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 49(2), pages 173-186, June.
    3. Pavlina R. Tcherneva, 2008. "The Return of Fiscal Policy: Can the New Developments in the New Economic Consensus Be Reconciled with the Post-Keynesian View?," Economics Working Paper Archive wp_539, Levy Economics Institute.
    4. Massimo Cingolani, 2015. "Sylos Labini su Marx: implicazioni per la politica economica (Sylos Labini on Marx: economic policy implications)," Moneta e Credito, Economia civile, vol. 68(269), pages 81-147.
    5. Sasaki, Hiroaki, 2012. "Is the long-run equilibrium wage-led or profit-led? A Kaleckian approach," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 231-244.
    6. Phil Armstrong, 2020. "Can Heterodox Economics Make a Difference?," Books, Edward Elgar Publishing, number 19964.
    7. Éric Tymoigne, 2003. "Keynes and Commons on Money," Journal of Economic Issues, Taylor & Francis Journals, vol. 37(3), pages 527-545, September.
    8. Mario Seccareccia & Eugenia Correa, 2017. "Supra-National Money and the Euro Crisis: Lessons from Karl Polanyi," Forum for Social Economics, Taylor & Francis Journals, vol. 46(3), pages 252-274, July.
    9. Lambert, Thomas, 2021. "The Baran Ratio, Investment, and British Economic Growth and Investment," MPRA Paper 109546, University Library of Munich, Germany.
    10. LORANGER, Jean-Guy, 2012. "Did Gold Remain Relevant in the Post-1971 International Monetary System?," Cahiers de recherche 2012-05, Universite de Montreal, Departement de sciences economiques.
    11. Francesco Lippi, 2021. "The Fiscal Arithmetic of a Dual Currency Regime," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(7), pages 1887-1897, October.
    12. Nishi, Hiroshi & Stockhammer, Engelbert, 2020. "Distribution shocks in a Kaleckian model with hysteresis and monetary policy," Economic Modelling, Elsevier, vol. 90(C), pages 465-479.
    13. Manuel Hensmans, 2011. "WHAT IS STRATEGY? The case of retail finance and English Building Societies," Working Papers CEB 11-049, ULB -- Universite Libre de Bruxelles.
    14. Zdravka Todorova, 2013. "Connecting social provisioning and functional finance in a post-Keynesian–Institutional analysis of the public sector," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(1), pages 61-75.
    15. Baccaro, Lucio & Howell, Chris, 2017. "Unhinged: Industrial relations liberalization and capitalist instability," MPIfG Discussion Paper 17/19, Max Planck Institute for the Study of Societies.
    16. Naba Kumar Adak, 2019. "Modern Money Theory is a hoax as its arguments are contradictory, based on irrational propositions, and impractical," Proceedings of International Academic Conferences 8910931, International Institute of Social and Economic Sciences.
    17. Thomas Cate (ed.), 2012. "Keynes’s General Theory," Books, Edward Elgar Publishing, number 3855.
    18. Eckhard Hein, 2019. "Karl Marx: an early post-Keynesian? A comparison of Marx's economics with the contributions by Sraffa, Keynes, Kalecki and Minsky," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 16(2), pages 238-259, September.
    19. Alla Semenova & L. Randall Wray, 2015. "The Rise of Money and Class Society: The Contributions of John F. Henry," Economics Working Paper Archive wp_832, Levy Economics Institute.
    20. L. Randall Wray, 2014. "From the State Theory of Money to Modern Money Theory: An Alternative to Economic Orthodoxy," Economics Working Paper Archive wp_792, Levy Economics Institute.

    More about this item

    Keywords

    Money; Chartalism; Credit; Knapp; Innes.;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:119866. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.