Quantity theory, Say’s law and effective demand in money theories

The paper analyses contributions, both orthodox and heterodox, in which effective demand is strictly connected with money supply. The principal thesis is that this idea is strictly connected with assuming two fundamental hypotheses. The first is that Say’s law or, in a more general way, Walras’ law no longer applies or in any case that there is no form of complementarity in the exchanges of goods and services within the social product. The second hypothesis is that money is a particular “good”. We stress that this theoretical paradigm is incompatible not only with money that is store of value, but also with commodity money or endogenous money strictly supplied in connection with credit cycle.