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Credit And Money In Schumpeter'S Theory

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Marcello Messori

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Abstract

Together with Wicksell and other German speaking authors, Schumpeter re-defined the foundations of monetary theory replacing the traditional view of money as a "veil", which facilitates exchanges, with the concept of money as capital, which acts as an essential premise for the starting of new production processes. However, these results were not enough to give credit to Schumpeter as monetary theorist. The present paper aims to show that this scanty renown of Schumpeter?s monetary theory is due to his attempt to reach a close integration between the monetary and the ?real? aspects of the economic system. This attempt implies, in fact, that Schumpeter does not examine the traditional monetary problems but deals with those money functions which are an essential part of the cyclical evolution of the economic system. Such functions, in their turn, found the so-called ?credit theory of money?, as opposed to the ?monetary theory of credit?. The ?credit theory of money? represents the main subject of this paper.

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Paper provided by Tor Vergata University, CEIS in its series Departmental Working Papers with number 169.

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Date of creation: Apr 2002
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Handle: RePEc:rtv:ceiswp:169

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  1. Klausinger, Hansjorg, 1990. " The Early Use of the Term "Veil of Money" in Schumpeter's Monetary Writings--A Comment," Scandinavian Journal of Economics, Blackwell Publishing, vol. 92(4), pages 617-21.
  2. Alan S. Blinder & Joseph E. Stiglitz, 1983. "Money, Credit Constraints, and Economic Activity," NBER Working Papers 1084, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Messori, Marcello & Tamborini, Roberto, 1995. "Fallibility, Precautionary Behaviour and the New Keynesian Monetary Theory," Scottish Journal of Political Economy, Scottish Economic Society, vol. 42(4), pages 443-64, November.
  4. Greenwald, Bruce & Stiglitz, Joseph E, 1993. "New and Old Keynesians," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 23-44, Winter. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Massimo Cingolani, 2008. "Full Employment as a Possible Objective for EU Policy I. A Perspective From the Point of View of The Monetary Circuit," Working Papers 200814, Faculty of economics, Department of Economics, revised Mar 2008. [Downloadable!]
  2. Marco Valentini, 2006. "Ristrutturazione del sistema creditizio, piccole e medie imprese e crescita economica nel mezzogiorno," Departmental Working Papers of Economics - University 'Roma Tre' 0065, Department of Economics - University Roma Tre. [Downloadable!]
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This page was last updated on 2009-11-29.


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