Credit, Money and Crises in Post-Keynesian Economics
Show Less

Credit, Money and Crises in Post-Keynesian Economics

Edited by Louis-Philippe Rochon and Hassan Bougrine

In this volume, Louis-Philippe Rochon and Hassan Bougrine bring together key post-Keynesian voices in an effort to push the boundaries of our understanding of banks, central banking, monetary policy and endogenous money. Issues such as interest rates, income distribution, stagnation and crises – both theoretical and empirical – are woven together and analysed by the many contributors to shed new light on them. The result is an alternative analysis of contemporary monetary economies, and the policies that are so needed to address the problems of today.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 17: Banking and financial crises

Jan Toporowski


Marc Lavoie and Mario Seccareccia have, together with John Smithin, been leading voices in recent discussions on monetary theory. Among Post-Keynesians they have stood out for their willingness to engage with the rapid evolution of policy, in the wake of the financial crisis of 2008, and for their creative approach to the doctrines of Post-Keynesian analysis. This chapter is therefore dedicated to them formally as well as in the sense that it presents a view of financial crisis that, in many respects, complements their original insights. There are few monetary economists today who doubt the idea that the supply of money is endogenous. That the number of such doubters is so reduced is, in good measure, due to the compelling case for endogeneity that has been put forward by the Canadian Post-Keynesians. The banking and financial crisis, however, stands out as something of an anomaly in this approach to monetary theory: if money, or credit, is generated by processes inherent in the functioning of the credit system according to need, then, by definition, a financial crisis cannot arise because of a shortage of credit. Such crises must be because banks refuse to lend as much as is necessary, or because of some disturbances in the price mechanism (a fall in asset prices, or a fall in the rate of profit in relation to the rate of interest).

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.