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Resolving economic deadlock


  • Pfeffer, Claus-Peter


In the introductory chapter a novel economic policy is proposed which consists of a) 'virtualizing' debt (putting it on the Central Bank balance sheet) and b) reduce the money-multiplier by an implementation of a strong minimum reserving policy. The main part shows exposes a flaw in the concept of capital in neoclassical thinking, with special reference to Tobin's q-theory. This has the implication that neoclassical thinking - Keynesian and 'classical' - overstates investment activity and the tendency to full employment. The last two chapters - on China and the Nazi-Recovery - are empirical illustrations.

Suggested Citation

  • Pfeffer, Claus-Peter, 2011. "Resolving economic deadlock," MPRA Paper 32221, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:32221

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    References listed on IDEAS

    1. Ritschl, Albrecht, 2002. "Deficit Spending in the Nazi Recovery, 1933-1938: A Critical Reassessment," Journal of the Japanese and International Economies, Elsevier, vol. 16(4), pages 559-582, December.
    2. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
    3. Schiantarelli, F. & Georgoutsos, D., 1990. "Monopolistic competition and the Q theory of investment," European Economic Review, Elsevier, vol. 34(5), pages 1061-1078, July.
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    More about this item


    Keynesianism; deficit spending; public debt; capital theory; monetary theory and policy;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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