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Woodford and Wicksell: a Cashless Economy or a Moneyless Economy Framework ?

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  • Nicolas Barbaroux

    (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - UJM - Université Jean Monnet - Saint-Étienne)

Abstract

Recently, one of the most fruitful debate in monetary macroececonomics that fascinates -and opposed- academics and policymakers has lied in the relevancy of money within the monetary policy analysis. Since the publication of King and Goodfriend 1997's article that gave birth to a new current -the New Neoclassical Synthesis- money seems to be de-emphasized1. A new step has been reached in 2003 with Woodford's monetary treatise that legitimates a Cashless framework. Woodford captures the "implied path of the money supply or the determinants of money demand" (Woodford, 2003, p.237) in the determination of the equilibrium of output and prices, without having to model the volume of money explicitly. Woodford gives his theory a Wicksellian flavour by comparing his cashless economy framework with Wicksell's pure credit economy framework. Such a legacy gives the impression that Wicksell's original writings downgraduated money for the conduct of monetary policy.

Suggested Citation

  • Nicolas Barbaroux, 2007. "Woodford and Wicksell: a Cashless Economy or a Moneyless Economy Framework ?," Post-Print ujm-00162418, HAL.
    • Handle: RePEc:hal:journl:ujm-00162418
    Note: View the original document on HAL open archive server: https://ujm.hal.science/ujm-00162418
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    References listed on IDEAS

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    1. Michael Woodford, 1998. "Doing Without Money: Controlling Inflation in a Post-Monetary World," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 173-219, January.
    2. Marvin Goodfriend & Robert G. King, 1997. "The New Neoclassical Synthesis and the Role of Monetary Policy," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 231-296, National Bureau of Economic Research, Inc.
    3. Nelson, Edward, 2003. "The future of monetary aggregates in monetary policy analysis," Journal of Monetary Economics, Elsevier, vol. 50(5), pages 1029-1059, July.
    4. Boianovsky, Mauro, 2006. "Woodford's Interest and Prices from the Perspective of the History and Methodology of Economic Thought: A Mini-Symposium," Journal of the History of Economic Thought, Cambridge University Press, vol. 28(2), pages 139-142, June.
    5. Michael Woodford, 2008. "How Important Is Money in the Conduct of Monetary Policy?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(8), pages 1561-1598, December.
    6. Laidler, David, 2006. "Woodford and Wicksell on Interest and Prices: The Place of the Pure Credit Economy in the Theory of Monetary Policy," Journal of the History of Economic Thought, Cambridge University Press, vol. 28(2), pages 151-159, June.
    7. Helge Berger & Jakob de Haan & Jan‐Egbert Sturm, 2011. "Does money matter in the ECB strategy? New evidence based on ECB communication," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 16-31, January.
    8. David Laidler, 2009. "Financial Stability, Monetarism and the Wicksell Connection," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 1(1), pages 60-79, September.
    9. Friedman, Milton, 1972. "Comments on the Critics," Journal of Political Economy, University of Chicago Press, vol. 80(5), pages 906-950, Sept.-Oct.
    10. Woodford, Michael, 2000. "Monetary Policy in a World without Money," International Finance, Wiley Blackwell, vol. 3(2), pages 229-260, July.
    11. Michael Woodford, 2000. "Monetary Policy in a World Without Money," International Finance, Wiley Blackwell, vol. 3(2), pages 229-260, July.
    12. Helge Berger & Jakob de Haan & Jan-Egbert Sturm, 2006. "Does money matter in the ECB strategy?," KOF Working papers 06-125, KOF Swiss Economic Institute, ETH Zurich.
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    2. Kenneth Enoch Okpala, 2015. "Cash less Policy and Economic Effects: A Review of Lagos State," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 5(4), pages 286-297.

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    Keywords

    Monetarism; Monetary Policy; De-emphasis of Money; Monetarism.;
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