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On Realizing Profits in Money

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  • Edward Nell

Abstract

A basic if neglected step in monetary theory is to show that a given amount of money will enable all transactions to take place in money. But if the money advanced is no more than current costs, how are profits to be realized in money? The answer requires tracing the pattern of circulation, which, in turn depends on the structure of production and distribution. The sectors have different patterns of interdependence, so imply different sequences of transactions. Borrowing is costly, so the amount of money must be minimized. These issues have been brought into focus in the interesting article of J-F Renaud.

Suggested Citation

  • Edward Nell, 2002. "On Realizing Profits in Money," Review of Political Economy, Taylor & Francis Journals, vol. 14(4), pages 519-530.
    • Handle: RePEc:taf:revpoe:v:14:y:2002:i:4:p:519-530
    DOI: 10.1080/0953825022000009933
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    References listed on IDEAS

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    1. Nell,Edward J., 1998. "The General Theory of Transformational Growth," Cambridge Books, Cambridge University Press, number 9780521590068, September.
    2. Ostroy, Joseph M. & Starr, Ross M., 1990. "The transactions role of money," Handbook of Monetary Economics, in: B. M. Friedman & F. H. Hahn (ed.), Handbook of Monetary Economics, edition 1, volume 1, chapter 1, pages 3-62, Elsevier.
    3. Edward J. Nell, 1967. "Wicksell's Theory of Circulation," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 386-386.
    4. Jean-Francois Renaud, 2000. "The Problem of the Monetary Realization of Profits in a Post Keynesian Sequential Financing Model: Two solutions of the Kaleckian option," Review of Political Economy, Taylor & Francis Journals, vol. 12(3), pages 285-303.
    5. Hicks, J. R., 1979. "Critical Essays in Monetary Theory," OUP Catalogue, Oxford University Press, number 9780198284239.
    6. Parguez, A. & Seccareccia, M., 1999. "A Credit Theory of Money: The Monetary Circuit Approach," Working Papers 9902e, University of Ottawa, Department of Economics.
    7. Seccareccia,M., 1991. "Post Keynesian Fundism and Monetary Circulation," Working Papers 9113e, University of Ottawa, Department of Economics.
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    Cited by:

    1. Jochen Hartwig, 2006. "Explaining the aggregate price level with Keynes's principle of effective demand," Review of Social Economy, Taylor & Francis Journals, vol. 64(4), pages 469-492.
    2. Olivier Allain, 2007. "Monetary circulation, the paradox of profits, and the velocity of money," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00196485, HAL.
    3. Javidanrad, Farzad, 2021. "Paradox of Monetary Profit, Shortage of Money in Circulation & Financialisation," The Warwick Economics Research Paper Series (TWERPS) 1365, University of Warwick, Department of Economics.
    4. Jochen Hartwig, 2004. "Keynes's multiplier in a two-sectoral framework," Review of Political Economy, Taylor & Francis Journals, vol. 16(3), pages 309-334.
    5. Guglielmo Forges Davanzati, 2014. "Unemployment benefits, the 'added worker effect' and income distribution in a monetary economy," Working Papers PKWP1402, Post Keynesian Economics Society (PKES).

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