Is there room for bulls, bears, and states in the circuit?

Arbeitspapier

This paper takes off from Jan Kregel's paper 'Shylock and Hamlet, or Are There Bulls and Bears in the Circuit?' (1986), which aimed to remedy shortcomings in most expositions of the circuit approach. While some circuitistes have rejected John Maynard Keynes's liquidity preference theory, Kregel argued that such rejection leaves the relation between money and capital asset prices, and thus investment theory, hanging. This paper extends Kregel's analysis to an examination of the role that banks play in the circuit, and argues that banks should be modeled as active rather than passive players. This also requires an extension of the circuit theory of money, along the lines of the credit and state money approaches of modern Chartalists who follow A. Mitchell Innes. Further, we need to take Charles Goodhart's argument about default seriously: agents in the circuit are heterogeneous credit risks. The paper concludes with links to the work of French circuitist Alain Parguez.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 700

Classification and Topics

• Classification: Wirtschaft ; History of Economic Thought since 1925: Socialist; Marxist; Sraffian ; History of Economic Thought since 1925: Historical; Institutional; Evolutionary; Austrian; Stockholm School ; History of Economic Thought: Individuals ; Current Heterodox Approaches: Socialist; Marxian; Sraffian ; Current Heterodox Approaches: Historical; Institutional; Evolutionary ; General Aggregative Models: Marxian; Sraffian; Kaleckian ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Demand for Money ; Interest Rates: Determination, Term Structure, and Effects ; Money Supply; Credit; Money Multipliers
• Subject: circuit approach ; liquidity preference ; banks as ephor of capitalism ; J. M. Keynes ; J. A. Schumpeter ; A. Parguez ; J. A. Kregel ; chartalist ; modern money theory ; state money ; credit money ; default

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Wray, L. Randall
• Event: Veröffentlichung
• (who): Levy Economics Institute of Bard College
• (where): Annandale-on-Hudson, NY
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/56988
• Last update: 10.03.2025, 11:42 AM CET