Veronese Passarella, M orcid.org/0000-0001-7652-5952 (2024) It is not la vie en rose: new insights from Graziani’s theory of the monetary circuit. European Journal of Economics and Economic Policies: Intervention, 21 (3). pp. 461-485. ISSN 2052-7764
Abstract
The aim of this paper is twofold. First, it shows how a standard stock–flow consistent model (SFCM) can be modified to embed some fundamental insights from Graziani’s theory of the monetary circuit (TMC). Second, it aims to address some common misconceptions about the TMC. More precisely, it is argued that: (a) a market-clearing price mechanism does not necessarily imply a neoclassical-like closure of the model; (b) the ways in which SFCMs and the TMC define bank loans are mutually consistent, although they are based on different accounting periods; (c) consumer credit is final finance, not initial finance; (d) the paradox of profit is not a logical conundrum, but an abstract counter-factual that allows the shedding of light on a neglected role of government spending; and (e) overall, the TMC can be regarded as a ‘Marxian’ rendition of Keynes’s method of aggregates.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2024 Edward Elgar Publishing Ltd. This is an open access article under the terms of the Creative Commons Attribution License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | macroeconomics; monetary economics; stock–flow consistent models; theory of the monetary circuit |
Dates: |
|
Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 29 Jul 2022 13:57 |
Last Modified: | 07 Nov 2024 16:33 |
Status: | Published |
Publisher: | Edward Elgar Publishing |
Identification Number: | 10.4337/ejeep.2022.0084 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:189466 |