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Bank credit and the labour market in a Keynesian theoretical perspective

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Listed:
  • Guglielmo Forges Davanzati
  • Andrea Pacella

Abstract

The idea that the banking system creates money ex nihilo, so that “loans make deposits”, can be regarded as a key concept of Keynes’s theory of money and banking, and it is a cornerstone of the contemporary monetary theory of production. Starting from this assumption, this paper aims at providing a critical reconstruction of Keynes’s view on the links existing between public expenditure, interest rate, wages and employment. The paper will mainly focus on Keynes’s Treatise on Money, on the basis of a “continuist” interpretation of Keynes’s thought.

Suggested Citation

  • Guglielmo Forges Davanzati & Andrea Pacella, 2013. "Bank credit and the labour market in a Keynesian theoretical perspective," STOREPapers 10_2013, Associazione Italiana per la Storia dell'Economia Politica - StorEP.
    • Handle: RePEc:hpo:wpaper:10_2013
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    References listed on IDEAS

    as
    1. Guglielmo Forges Davanzati & Andrea Pacella & Riccardo Realfonzo, 2009. "Fiscal policy in the monetary theory of production: an alternative to the "new consensus" approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 31(4), pages 605-621, July.
    2. Patinkin, Don, 1990. "On different interpretations of the General Theory," Journal of Monetary Economics, Elsevier, vol. 26(2), pages 205-243, October.
    3. Christian R. Proaño & Peter Flaschel & Hans-Martin Krolzig & Mamadou Bobo Diallo, 2011. "Monetary policy and macroeconomic stability under alternative demand regimes," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 569-585.
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    Keywords

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    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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