IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v23y1999i1p103-13.html
   My bibliography  Save this article

The Credit-Led Supply of Deposits and the Demand for Money: Kaldor's Reflux Mechanism as Previously Endorsed by Joan Robinson

Author

Listed:
  • Lavoie, Marc

Abstract

The purpose of this note is to reconsider the puzzle arising from a theory of endogenous credit-money: if the supply of bank credit is the source of bank deposits, what would occur when the supply of bank deposits exceeds the demand for deposits? It has recently been argued that changes in interest rate differentials would be the primary mechanism through which such an inequality could be reduced back to equality. The argument here is that such a mechanism is a secondary one, akin to Kaldor's reflux principle, which is itself the primary mechanism, when properly generalized to increases in advances generated by the private, the public, and the external sectors, and when reflux is extended to all agents, including households and banks. Copyright 1999 by Oxford University Press.

Suggested Citation

  • Lavoie, Marc, 1999. "The Credit-Led Supply of Deposits and the Demand for Money: Kaldor's Reflux Mechanism as Previously Endorsed by Joan Robinson," Cambridge Journal of Economics, Oxford University Press, vol. 23(1), pages 103-113, January.
  • Handle: RePEc:oup:cambje:v:23:y:1999:i:1:p:103-13
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eckhard Hein, 2007. "Interest Rate, Debt, Distribution And Capital Accumulation In A Post-Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 58(2), pages 310-339, May.
    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).
    3. Jo Michell, 2016. "Do shadow banks create money? 'Financialisation' and the monetary circuit," Working Papers PKWP1605, Post Keynesian Economics Society (PKES).
    4. Gechert, Sebastian, 2012. "The multiplier principle, credit-money and time," MPRA Paper 34648, University Library of Munich, Germany.
    5. Bossone, Biagio, 2001. "Circuit theory of banking and finance," Journal of Banking & Finance, Elsevier, vol. 25(5), pages 857-890, May.
    6. repec:eme:jfeppp:jfep-05-2016-0033 is not listed on IDEAS
    7. Eckhard Hein, 2006. "Interest, Debt and Capital Accumulation—A Kaleckian Approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(3), pages 337-352.
    8. Alexey Ponomarenko, 2017. "A note on money creation in emerging market economies," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 9(1), pages 70-85, April.
    9. Giancarlo Bertocco, 2005. "The Role of credit in a Keynesian monetary economy," Review of Political Economy, Taylor & Francis Journals, vol. 17(4), pages 489-511.
    10. Marc Lavoie, 2001. "Endogenous Money in a Coherent Stock-Flow Framework," Economics Working Paper Archive wp_325, Levy Economics Institute.
    11. Claude Gnos & Louis-Philippe Rochon, 2003. "Joan Robinson and Keynes: finance, relative prices and the monetary circuit," Review of Political Economy, Taylor & Francis Journals, vol. 15(4), pages 483-491.
    12. Hein, Eckhard, 2004. "Money, credit and the interest rate in Marx's economic. On the similarities of Marx's monetary analysis to Post-Keynesian economics," MPRA Paper 18608, University Library of Munich, Germany.
    13. Marc Lavoie & Wynne Godley, 2000. "Kaleckian Models of Growth in a Stock-Flow Monetary Framework: A Neo-Kaldorian Model," Economics Working Paper Archive wp_302, Levy Economics Institute.
    14. Giuseppe Fontana & Alfonso Palacio-Vera, 2002. "Monetary Policy Rules: What Are We Learning?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 24(4), pages 547-568, July.
    15. Enzo Dia, 2004. "Imperfect Information and Monopolistic Pricing in the Banking Industry," Working Papers 74, University of Milano-Bicocca, Department of Economics, revised May 2004.
    16. Eckhard Hein, 2006. "Money, interest and capital accumulationin Karl Marx's economics: a monetary interpretation and some similaritiesto post-Keynesian approaches," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 13(1), pages 113-140.
    17. Angel Asensio, 2015. "Endogenous interest rate with accommodative money supply and liquidity preference," CEPN Working Papers halshs-01231469, HAL.
    18. Jan Korda, 2011. "Monetární nerovnováha v teorii endogenních peněz
      [Monetary Disequilibrium in the Theory of Endogenous Money]
      ," Politická ekonomie, University of Economics, Prague, vol. 2011(5), pages 680-705.
    19. Jamee K. Moudud, 2010. "Strategic Competition, Dynamics, and the Role of the State," Books, Edward Elgar Publishing, number 4241.
    20. repec:bla:metroe:v:68:y:2017:i:2:p:354-377 is not listed on IDEAS
    21. Louis-Philippe Rochon & Sergio Rossi, 2013. "Endogenous money: the evolutionary versus revolutionary views," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(2), pages 210-229, January.
    22. Massimo Cingolani, 2008. "Full Employment as a Possible Objective for EU Policy I. A Perspective From the Point of View of The Monetary Circuit," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 55(1), pages 89-114, March.
    23. Angel Asensio, 2015. "Endogenous interest rate with accommodative money supply and liquidity preference," Working Papers halshs-01231469, HAL.

    More about this item

    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:oup:cambje:v:23:y:1999:i:1:p:103-13. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: https://academic.oup.com/cje .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.