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Lost and Found: Some History of Endogenous Money in the Twentieth Century

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The Monetary Theory of Production

Abstract

This chapter started in an airport waiting room. I happened on Tim Congdon, and we talked about Keynes’s monetary theory while we waited for our flight. The conversation brought into sharp focus an idea that had been festering in the back of my mind for some little time: that I had been brought up to take the endogenous generation of money (deposits) by banks for granted; why was it necessary for the modern theory of endogenous money to re-invent the concept? But Tim had been given a very different understanding. An informal survey of other economist friends of roughly his age (currently (2003) around the age of fifty), showed a pretty uniform experience of having been taught that ‘the central bank provides money and the banks multiply it’, as Roger Backhouse (in conversation) succinctly characterised the money-base theory of the money supply. Clearly something had happened somewhere between the time of my under- and post-graduate education in the late 1950s-early 60s to theirs some 15 years later.

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Authors
  1. Victoria Chick
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Editor information

Editors and Affiliations

  1. University of Leeds, UK

    Giuseppe Fontana (Senior Lecturer in Economics, Associate Professor) (Senior Lecturer in Economics, Associate Professor)

  2. University of Sannio, Italy

    Giuseppe Fontana (Senior Lecturer in Economics, Associate Professor) & Riccardo Realfonzo (Professor of Theories and Methods of Political Economy) (Senior Lecturer in Economics, Associate Professor) &  (Professor of Theories and Methods of Political Economy)

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© 2005 Victoria Chick

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Chick, V. (2005). Lost and Found: Some History of Endogenous Money in the Twentieth Century. In: Fontana, G., Realfonzo, R. (eds) The Monetary Theory of Production. Palgrave Macmillan, London. https://doi.org/10.1057/9780230523074_4

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