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Circuit with Multi-period Credit

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  • Edouard Cottin-Euziol
  • Louis-Philippe Rochon

Abstract

We develop a circuit model in which firms finance part of their investment using bank credit issued and reimbursed over several periods. The model has three main properties: profits originate in the overlap of investments financed by bank credit that remain to be repaid; Say's Law is not verified, even when households do not save within a period; and the rate of investment must increase and then level off over time to avoid an overproduction crisis.

Suggested Citation

  • Edouard Cottin-Euziol & Louis-Philippe Rochon, 2013. "Circuit with Multi-period Credit," Review of Political Economy, Taylor & Francis Journals, vol. 25(3), pages 461-475, July.
    • Handle: RePEc:taf:revpoe:v:25:y:2013:i:3:p:461-475
    DOI: 10.1080/09538259.2013.807672
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    References listed on IDEAS

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    1. Graziani,Augusto, 2003. "The Monetary Theory of Production," Cambridge Books, Cambridge University Press, number 9780521812115.
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    Cited by:

    1. Edouard Cottin-Euziol & Nicolas Piluso, 2020. "Revenues and demand in a monetary economy of production [Revenus et demande dans une économie monétaire de production]," Working Papers hal-02511407, HAL.
    2. Edouard Cottin-Euziol & Nicolas Piluso, 2024. "Refutations of Say’s Law and Dynamics of a Monetary Economy of Production," Review of Radical Political Economics, Union for Radical Political Economics, vol. 56(1), pages 101-115, March.

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