The Need for a Financial System?

  • D. Gareth Thomas


This introductory chapter presents the scope of the book and summarises its main theme, in particular the need to develop a monetary model that goes beyond the traditional theory of a barter system, or one with one-commodity used as money to proxy the ‘workings’ of a modern-day economy, with credit. The assumption of money neutrality is dropped along with treating the medium of exchange as a ‘veil’.


Financial system Monetary model Credit Money neutrality 

References and Further Reading

  1. Bywaters, D., & Mlodkowski, P. (2012). The Role of Transactions Cost in Economic Growth. The International Journal of Economic Policy Studies, 3(7), 54–66.Google Scholar
  2. Friedman, M. (1970). The Counter-Revolution in Monetary Theory. London: The Institute of Economics Affairs.Google Scholar
  3. Hahn, F. (1981). Money and Inflation. Oxford: Bail Blackwell Publisher.Google Scholar
  4. Keen, S. (2011). Debunking Economics: The Naked Emperor Dethroned? London: Zed Books Ltd. Chaps. 13 & 14.Google Scholar
  5. Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan (Reprint, 2007).Google Scholar
  6. Minsky, P. H. (2008). Stabilizing an Unstable Economy. New York: McGraw-Hill.Google Scholar
  7. Roubini, N., & Mihm, S. (2010). Crisis Economics: A Crash Course in the Future of Finance. London: Penguin Books.Google Scholar
  8. Schumpeter, J. A. (1934). The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and Business Cycle. New Brunswick, NJ: Transaction Publishers (Reprint, 1996). Chap. III.Google Scholar
  9. Schumpeter, J. A. (1943). Capitalism, Socialism and Democracy. London: Routledge (Reprint, 1992). Chap. VII.Google Scholar
  10. Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. London: Penguin Classics (Reprint, 1986).Google Scholar
  11. Tobin, J. (1963). Commercial Banks as Creators of ‘Money’, No. 159, Cowles Foundations Discussion Papers from Cowles Foundation for Research in Economics, Yale University in W. L. Smith, & R. L. Teign (Eds.). (1974). Readings in Money, National Income, and Stabilization Policy (3rd ed.), 224–229. Homewood, IL: Richard D. Irwin Inc.Google Scholar
  12. Click on the link ( to download the BBC radio programme on the ‘Economic Rebellion’, which summaries the need for this framework to be included in mainstream economics.

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • D. Gareth Thomas
    • 1
  1. 1.Department of Accounting, Finance and EconomicsUniversity of Hertfordshire Business SchoolHatfieldUK

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