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The Endogeneity of Money: Empirical Evidence

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  • Peter Howells

    ()
    (School of Economics, University of the West of England)

Abstract

For many years, the endogenous nature of the money supply has been a cornerstone of post-Keynesian economics. In this paper we survey the empirical work which has been done on both the ‘core’ thesis – that loans create deposits – and on peripheral questions such as the origin of the demand for loans, the reconciliation of the demand for money with the loan-created supply and the accommodationist/structuralist debate. The originality of the paper lies in its demonstration that while post-Keynesians may have thought they were fighting in heroic isolation, most economists involved with the real world of monetary policy-making in practice took much the same view. The consequence is that we can find empirical investigations of issues relating to the endogeneity in a wide range of locations.

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File URL: http://carecon.org.uk/DPs/0513.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol in its series Working Papers with number 0513.

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Length: 31 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:uwe:wpaper:0513

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Keywords: Money; endogeneity;

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References

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  1. Hewitson, Gillian, 1995. " Post-Keynesian Monetary Theory: Some Issues," Journal of Economic Surveys, Wiley Blackwell, vol. 9(3), pages 285-310.
  2. L. Randall Wray, 1992. "Commercial Banks, the Central Bank, and Endogenous Money," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 14(3), pages 297-310, April.
  3. B. J. Moore & B. W. Smit, 1986. "Wages, Money and Inflation," South African Journal of Economics, Economic Society of South Africa, vol. 54(1), pages 48-56, 03.
  4. Robert Pollin, 1991. "Two Theories of Money Supply Endogeneity: Some Empirical Evidence," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 13(3), pages 366-396, April.
  5. Giuseppe Fontana, 2003. "Post Keynesian Approaches to Endogenous Money: A time framework explanation," Review of Political Economy, Taylor & Francis Journals, vol. 15(3), pages 291-314.
  6. Davidson, Paul & Weintraub, Sidney, 1973. "Money as Cause and Effect," Economic Journal, Royal Economic Society, vol. 83(332), pages 1117-32, December.
  7. Melitz, Jacques & Pardue, Morris, 1973. "The Demand and Supply of Commercial Bank Loans," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 5(2), pages 669-92, May.
  8. Caporale, Guglielmo Maria & Hassapis, Christis & Pittis, Nikitas, 1998. "Unit roots and long-run causality: investigating the relationship between output, money and interest rates," Economic Modelling, Elsevier, vol. 15(1), pages 91-112, January.
  9. Thomas I. Palley, 1991. "The Endogenous Money Supply: Consensus and Disagreement," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 13(3), pages 397-403, April.
  10. Iris Biefang-Frisancho Mariscal & Peter Howells, 2002. "Central Banks and Market Interest Rates," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 24(4), pages 569-585, July.
  11. Sprenkle, C M & Miller, M H, 1980. "The Precautionary Demand for Narrow and Broad Money," Economica, London School of Economics and Political Science, vol. 47(188), pages 407-21, November.
  12. Howells, Peter & Hussein, Khaled, 1998. "The Endogeneity of Money: Evidence from the G7," Scottish Journal of Political Economy, Scottish Economic Society, vol. 45(3), pages 329-40, August.
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Cited by:
  1. M. Lopreite, 2012. "The endogenous money hypothesis and securitization: the Euro area case (1999-2010)," Economics Department Working Papers 2012-EP02, Department of Economics, Parma University (Italy).
  2. Hein, Eckhard, 2010. "The rate of interest as a macroeconomic distribution parameter: Horizontalism and Post-Keynesian models of distribution of growth," IPE Working Papers 07/2010, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

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  1. Utente:NUMB3RN7NE in Wikipedia (Italian)

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