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Krugman Meets Marx and Keynes at the Baby-Sitting Co-op

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  • Mark Lautzenheiser
  • Yavuz Yaşar

Abstract

Paul Krugman tells the story of the Capitol Hill baby-sitting co-op as a means of introducing readers to the economics of recessions. We take the story from where Krugman stops and develop it by presenting different aspects of a monetary economy with the help of a graphical analysis. This is done with the introduction of history of economic thought to the curriculum by visiting monetary theories of Karl Marx's Capital (1867) and John Maynard Keynes's A Treatise on Money (1930). The benefit of using these two sources is twofold. First, it is possible to find a common theory in both Marx and Keynes's writings to explain the baby-sitting co-op story. Second, it is possible to move beyond the story and introduce other aspects of a monetary economy such as endogenoity of money, industrial and financial circulation of money, etc. In addition, a graphical framework is developed as teaching aid.

Suggested Citation

  • Mark Lautzenheiser & Yavuz Yaşar, 2013. "Krugman Meets Marx and Keynes at the Baby-Sitting Co-op," Forum for Social Economics, Taylor & Francis Journals, vol. 42(1), pages 24-37, March.
    • Handle: RePEc:taf:fosoec:v:42:y:2013:i:1:p:24-37
    DOI: 10.1007/s12143-011-9090-0
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    1. L. R. Wray, 1990. "Money and Credit in Capitalist Economies," Books, Edward Elgar Publishing, number 474.
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