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The standard neoclassical method for building macroeconomics upon a microeconomic foundation has proven unable to anticipate and account for actual issues, especially the financial and economic crisis that burst in 2008. In this chapter we show that it would be appropriate to return to the method once used by classical writers, who considered the economy as a whole and referred to institutions and production conditions as the cornerstone of economic activity. This was also Keynes’s method, in developing the concept of a monetary economy of production. We show that a renewed analysis of the economy as a whole would open up a range of new perspectives on macroeconomics.

This paper proposes a new interpretative framework for Galiani's monetary theory. The main argument is that, by adopting “the methodology of successive approximations” (correctly attributed to him by Luigi Einaudi), Galiani investigated the theoretical foundations of the two archetypal moneys: metallic money and paper money. On these foundations, he developed the model of a complex monetary economy based on the coexistence of a metallic and a fiduciary circulation. The paper also illustrates how the experience of the “public banks” of Naples inspired his analysis, thus shedding new light on the theoretical and institutional richness of his monetary thought.

This paper explains the return correlation between money and competing assets, the coexistence puzzle, and the effect of inflation on output. As the model allows sellers to use lands as an input, buyers’ portfolios can rebalance from money to land in response to inflation expanding sellers’ production, which explains the positive correlation between output and inflation and the negative correlation between the return on money and land. Although the return on money is dominated by land, both assets are used in equilibrium.

The present paper proposes a reflection on the current monetary system and the more suitable environmental possibilities of currency. The choice of the theme is justified by the high environmental impact that official currencies cause, contrary to the growing need for preservation of natural resources. The objective is to verify the possibility of substitution or parallel use in the economy of alternative currencies, built on safe technological innovations. Therefore, the theory of sustainable development as a paradigm for monetary economy analysis is initially proposed. After that, a check is made of the weaknesses of the official currency in terms of sustainability. Finally, alternatives to the traditional model are analyzed, with the delimitation of the virtual instruments applied to the currency. The method of approach used is the legal dialectic, using methods of bibliographic and documentary research. As a result, it can be concluded that the technology applied to currencies can contribute to the compatibility of agility and safety in the economy with sustainable development.

There was a time, not so long ago, when two economists, both working in England, sought to construct theoretical models of a monetary economy that might enable them not only to understand the worki...

We explore a short run structural macroeconomic model with a focus on “the problem of financing economic development“ (Kaleçki, 1976). It is demonstrated that banks, in contrast to nonbanks, have a unique role to play in the production and circulation of commodities in a monetary economy. A case is made for class-based policy.

This paper discusses exchange rate behavior in what we call a peripheral monetary economy. First, it analyzes the essential properties of an open monetary economy, stressing the notions of assets' ...

(from the 1988 French edition): Saving is the scourge of any economy that is not the mythological barter society of Ricardian economics. The author infers that saving is the major cause of unemployment in monetary economies.

International audience; This study proposes an institutionalist analysis of financialization through the lens of Veblen, built on some peculiar characteristics of money and related financial relations in a market-based capitalist economy. Following the case of the overcapitalization of farmlands, studied by Veblen in The Vested Interests, the analysis argues that modern capitalism is a financialized society dominated by vested interests that rely on financial liberalization-led speculative overcapitalization that often leads to a perverse accumulation process and results in systemic catastrophes. Consequently, one of the major constituent institutions of liberal finance, market-dependent self-regulation, reveals to be unable to deal with society-level issues such as financial stability. This latter must be handled at a systemic level as a public good. Therefore specific public regulation and action mechanisms must be designed to maintain society (and dominant vested-interests) within some viability limits to ensure a smooth functioning of the economy.

The presentation of the model in Chapter 6 showed that the dimension of the state space of the monetary economy in disequilibrium for which the dynamics needs to be defined increased from two to four adding the vector of prices and wages (p, w) to the pair of money balances and expected prices (M, pe).

Chapter 3 analyzes the real side of the Soviet economic development, focusing on long-term productivity growth. Given the simple structure of the Soviet monetary economy, productivity almost directly reflected how efficiently funds were utilized. Consequently, a chronic stagnation in productivity growth probably caused a parallel accumulation of low-productivity material assets in the enterprise sector and of nonperforming financial assets in the household sector. The empirical analysis using the extended Solow residual calculation and the direct estimation of the normalized constant elasticity of substitution production function that were developed for this book indicated a long-term decreasing trend in Soviet productivity growth. The bottom-line evaluation of the Soviet monetary management was that it could not contribute to increasing productivity.

International audience; I propose an institutionalist analysis of financialization through the lens of Thorstein Veblen, built on some peculiar characteristics of money and related financial instruments in a market-based capitalist economy. Following the case of the overcapitalization of farmlands, studied by Veblen (1919), I argue that modern capitalism is a financialized society dominated by vested interests that rely on financial liberalization-led speculative overcapitalization, often leading to a perverse accumulation process and resulting in systemic catastrophes. Consequently, one of the major constituent institutions of liberal finance, market-dependent selfregulation, proves unable to deal with society-level issues like financial stability. This latter issue must be handled at a systemic level, as a public good. Therefore, specific public regulation and action mechanisms must be designed to maintain society (and dominant vested-interests) within some viability limits to ensure a smooth functioning of the economy.

Spanish Abstract: El libro que aqui se resena es un trabajo ambicioso que bien podria calificarse como un Tratado moderno sobre instituciones monetarias y politica monetaria. Si bien es un libro que trabaja sobre el campo de la economia monetaria, su enfoque desborda esta disciplina para incorporar un estudio multidisciplinar que analiza la metafisica (parte I), la epistemologia (parte II), la etica (parte III) y la politica (parte IV) del dinero. English Abstract: The book we review here is an ambitious work that can well be described as a modern treatise on monetary institutions and monetary policy. Although it is a book that works on the field of the monetary economy, its approach goes beyond this discipline to incorporate a multidisciplinary study that analyzes the metaphysics (part I), the epistemology (part II), the ethics (part III) and the politics (Part IV) of money.

Spanish Abstract: La teoria cuantitativa del dinero es un instrumento util para analizar la teoria y la politica monetaria. En ella se puede expresar la economia real y monetaria, y estudiar diversas reglas monetarias como el inflation targeting, la regla de Friedman y la regla de Hayek. Una de sus maximas virtudes es lo facil que es expresar sus tres versiones en terminos empiricos, aunque tambien tiene sus limites. La informacion llega demasiado tarde y no incluye tasas de interes, ni precios relativos. English Abstract: The quantitative theory of money is a useful tool for analyzing theory and monetary policy. It can express the real and monetary economy, and study various monetary rules such as inflation targeting, and those of Friedman and Hayek. One of its greatest virtues is how easy it is to express its three versions in empirical terms, although it also has its limits. The information comes too late and does not include interest rates and relative prices.

I study how the specic details of a micro founded monetary economy aect the determination of government policy. I consider three variants of the Lagos-Wright monetary framework: a benchmark were all markets are competitive; a case which allows for nancial intermediaries; and a case with trading frictions. Although intitutions/frictions are shown to have a signicant structural impact in the determination of policy, the calibrated articial economies are observationally equivalent in steady state. The policy response to aggregate shocks is qualitatively similar in the variants considered. However, there are signicant quantitative dierences in the response of government policy to productivity shocks, mainly due to the idiosyncratic behavior of money demand. The variants with no trading frictions display the best t to U.S. post-war data.

Using a dynamic monetary model, this paper analyzes the short- and long-run impacts of a tariff-tax reform on the economy, with attention being paid to short-run fluctuations in exchange rates. When a policy reform is announced and if the public believe that it will decrease excess demand, the domestic currency depreciates now to reflect its future depreciation. On the contrary, the domestic currency immediately appreciates if the public believe that it will increase excess demand. However, if there is a relatively small increase in excess demand, the public may mis-react in the exchange rate market by observing currency depreciation first and then appreciation toward the steady-state rate.

Durante il XIV secolo la moneta divenne in Europa un importante oggetto di studio e molti testi, scritti soprattutto da teologi, furono dedicati all’analisi teorica del suo ruolo sociale e alla definizione delle sue funzioni economiche. Partendo dalla lettura di un testo del francescano Francesc Eiximenis, pubblicato da Paolo Evangelisti, il saggio esamina la teoria, allora assai diffusa, della moneta intesa quale istituzione sociale, e confronta questa teoria con l’uso pratico e mercantile della moneta, intesa invece come misura del valore e come strumento di scambio. In fourteenth century Europe, money became an important subject of study and a lot of texts, written mainly by theologians, were devoted to theoretical analysis of its social role and to the definition of its economic functions. Starting from a text of the Franciscan Francesc Eiximenis, published by Paolo Evangelisti, the essay examines the theory, widespread at the time, of money as a social institution, and compares this theory with the practical and mercantile use of money, as the measure of value and as a medium of exchange.

Review to Jan Kregel's book "Monetary economy of production. Money, instability and crisis" DGAPA, Faculty of Economics, Institute of Economic Research-UNAM Mexico, 2015 Coords: Eugenia Correa and Alicia Giron. Analysis of the monetary economy in conditions of instability and crisis.

The present article analyses the indistinct boundaries between formal and informal economic exchanges, with a focus on friendship and work relations. To illustrate these intersections, we present a study of Swedish lifestyle entrepreneurs who run small-scale horse-related enterprises. The specific characteristics of this form of business—in which the horse farm owners/operators, customers, employees, and voluntary workers share a leisure interest in horses and participate in the everyday work on the farm—provide the foundation for a work environment where personal favour exchanges and a gift economy are intertwined with a monetary economy. Drawing on Viviana Zelizer’s notion of ‘relational work,’ the present analysis focuses on how relationships, transactions, and forms of repayments are constantly negotiated along a continuum between work-oriented friendship and friendly work relations. The empirical illustrations demonstrate the limitations of the notion of boundary work often employed in studies of relational work—which emphasizes boundary definition. In contrast, it seems that relational work may also involve practices that intentionally maintain indistinct boundaries between different types of relationships, thus sustaining tension between a formal and informal economy. (Less)

The paper adresses the problem of a monetary economy with costs of information, imposed in linear form. In particular, we make use of a strategic market game with money where equilibria are standardly non-Walrasian, permitting an active role to monetary policy. The imposition of information costs alters the demand of real balances since traders demand extra money for gathering and processing the necessary information. As a result, money injections could be proved welfare improving only when the induced information costs do not offset the resulted gains to trade.

Using a dynamic model of an open monetary economy, this paper examines the effects of tourism-related anticipated shocks on goods prices and foreign exchange reserves. Foreign tourists consume mainly non-traded goods in holiday destinations, converting them into exportable goods. This gives rise to a tourism terms-of-trade effect that affects the accumulation of foreign exchange. Announcements of anticipated events bring tourist visits forward, resulting in an initial under-adjustment or an over-adjustment in the prices of the non-traded goods when the tourism terms-of-trade effect is positive or negative. This leads to an increase or a decrease in foreign reserves in the long run.

A body of nearly 2,000 English finds of individual coins minted c. 973–1100 is surveyed as evidence for the scale and form of the monetary economy. A long-term view indicates that this was a period of expansion in coin use, although growth in this area remained limited compared to the later middle ages, or even the eighth century. Within the eleventh century single-finds suggest more specific developments, including a decline in coin use after the Norman Conquest, and substantial short-term fluctuations related to various economic and monetary factors. Comparison with estimates of coin production suggests a general trend for more of mints' output to enter domestic circulation after c. 1030/40, though this need not solely reflect an increase in monetization. These chronological changes are compared with the pattern of circulation within England. Overall, the kingdom enjoyed a unified currency which did not see marked localization of coin circulation. Parts of northern England were less integrated with the south, but not so far as to suggest active exclusion of non-local coin. More striking was a general trend for both production and circulation to be concentrated in the east and the south.