2 trivial questions

Doug Henwood dhenwood at panix.com
Thu Jan 4 09:43:35 PST 2001


Justin Schwartz wrote:


>No. You are just offering something for sale. The government
>increases the money supply by printing money or offering credit. If
>it doesn't, your offer just means that there is the same amount of
>money chasing more goods--other things being equal.

Though if you believe in an endogenous money supply, as did Marx* and do most post-Keynesians, you think that the government (i.e., the central bank) merely validates the private creation of money by banks and other private actors.

Doug

----

*"The amount of bills in circulation, therefore, just like the amount of banknotes, is determined solely by the needs of commerce," and "This much is clear, that prices are not high or low because much or little money circulates, but that much or little money circulates because prices are high or low; and, further, that the velocity of the circulating money does not depend on its quantity, but that the quantity of the circulating medium depends on its velocity...."



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