Money Variables, Real Variables and Financial Assets

Abstract

We have already posited a close relation, in terms of methodological approach, between Classical political economy and post-Keynesian theory. This we said was in terms of emphasis on the distribution of income among broad social classes through the approach of real physical costs of production (most especially labour) and the concept of a surplus of output over real input costs in a world where output is produced and reproducible in an historical context. The role of relative prices in distributing a given quantity of already produced (and thus scarce, but not in the classical sense of not being reproducible) output was not an integral part of this scheme.