Money and macroeconomic methodology

• Published in: Routledge Handbook of Macroeconomic Methodology pp. 154 - 160
• Main Author: Gnos, Claude
• Format: Book Chapter
• Language: English
• Published: Routledge 2023
• Edition: 1
• Subjects: Neoclassical Approach; Macroeconomic Theory; Vice Versa; Microeconomic Variables; DSGE; Keynes's Macroeconomic Theory; Real Exchange Economy; Community's Earnings; Money; Gdp Growth; Symbolic Pseudo-mathematical Methods; Production; Keynes's General Theory; Classical Quantity Theory; Keynes's Macroeconomic; Macroeconomics; Neoclassical General Equilibrium Model; Micro-founded Approach; Microeconomic Determinants; Capitalist System; Alain Parguez; Quantity Theory; Double Entry Principle; Monetary Production Economy; Income Formation and Spending; Economic Journal; Circuit Theory; CW; Liquidity Preference; Cowles Commission Approach; Successive Spending; Keynes
• ISBN: 1138816620; 9781032463490; 103246349X; 9781138816626
• DOI: 10.4324/9781315745992-17

A traditional view still predominant in economics is that money is somehow a good or a financial asset acting as a medium of exchange. This view involves the conception that macroeconomics has essentially to deal with aggregates determined by individual behaviours interacting in various markets, which means, in other words, that only microeconomics can make the foundation of macroeconomics. This chapter is intended, first, to examine how Keynes initiated an approach to macroeconomics that transcends the microeconomic determinants of economic activity and renews monetary theory while putting focus on production, the formation and spending of money income and the financing of the whole process. Second, it examines the contribution of circuit theory which endeavours to meet Keynes's methodological challenge while exploring the banking and accounting nature of money.