The Monetary Foundation of the Economic Circuit and the Principle of Effective Demand in Marx, Keynes and Kalecki

64 Pages Posted: 10 Oct 2009

See all articles by Hernando Matallana

Hernando Matallana

Universidad de los Andes, Colombia - Department of Economics

Date Written: November 5, 2008

Abstract

Marx carried out the first full inquiry on the economics of the all-comprising circulation process of capital, first in Grundrisse in the late 1850s, and later in Capital and Theories of Surplus Value in the 1860s and the 1870s. Two substantial aspects are at the center of Marx’s analysis: (a) the monetary determination of the social process of production and circulation of capital, i.e. the fact that money-capital is a social relation determining the interaction of agents in the monetary production economy alias capitalism; and (b) the notion of the economic circuit as the key economic category for the understanding of the monetary logic of the principle of effective demand. These aspects are also at the center of Keynes’s and Kalecki’s foundation of the theory of the monetary production economy.

Keywords: Accounting dynamics, capital, circulation process, effective demand, inputoutput analysis Marx, monetary production economy

JEL Classification: B14, B22, E40

Suggested Citation

Matallana, Hernando, The Monetary Foundation of the Economic Circuit and the Principle of Effective Demand in Marx, Keynes and Kalecki (November 5, 2008). Available at SSRN: https://ssrn.com/abstract=1485755 or http://dx.doi.org/10.2139/ssrn.1485755

Hernando Matallana (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

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