Circulation and effective demand: a comment on Nell

Authors: Lautzenheiser, Mark; Yasar, Yavuz

Source: Cambridge Journal of Economics, Volume 30, Number 4, 1 July 2006 , pp. 651-656(6)

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Abstract:

In a recent paper in this Journal, Ed Nell presented a theory of circulation intended to unify `the theories of money, production, and effective demand'. The current comment uses a very simple leakage and injection approach to arrive at some of Nell's results. In doing so, we are able to correct a small slip in Nell's original paper. More importantly, with the slip corrected, the money supply and multiplier processes are seen to be one and the same.

Keywords: Circulation; Money; Macroeconomics

Document Type: Research article

DOI: http://dx.doi.org/10.1093/cje/bei108

Publication date: 2006-07-01

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The Cambridge Journal of Economics, founded in 1977 in the traditions of Marx, Keynes, Kalecki, Joan Robinson and Kaldor, provides a forum for theoretical, applied, policy and methodological research into social and economic issues.