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The Emergence of Profit and Interest in the Monetary Circuit

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  • Egmont Kakarot-Handtke

Abstract

Efficient progress of the monetary theory of production (MTP) is hampered by an unsatisfactory account of how profit and interest emerge in the monetary circuit. As matter of fact, this question puzzled already the classics. It seems evident that it cannot be answered by applying the usual tools. The present paper's purpose is to overcome the deadlock. This is done by setting the circulation approach on general structural axiomatic foundations. View the Open Peer Discussion of this paper »

Suggested Citation

  • Egmont Kakarot-Handtke, 2013. "The Emergence of Profit and Interest in the Monetary Circuit," World Economic Review, World Economics Association, vol. 2013(2), pages 106-106, February.
    • Handle: RePEc:wea:worler:v:2013:y:2013:i:2:p:106
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    References listed on IDEAS

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    1. Johannes J. Klant, 1994. "The Nature Of Economic Thought," Books, Edward Elgar Publishing, number 262.
    2. Kakarot-Handtke, Egmont, 2011. "Reconstructing the Quantity Theory (I)," MPRA Paper 32421, University Library of Munich, Germany.
    3. Giuseppe Fontana & Riccardo Realfonzo, 2005. "Introduction: The Monetary Theory of Production," Palgrave Macmillan Books, in: Giuseppe Fontana & Riccardo Realfonzo (ed.), The Monetary Theory of Production, pages 1-19, Palgrave Macmillan.
    4. Robert E. Hall, 2011. "The Long Slump," American Economic Review, American Economic Association, vol. 101(2), pages 431-469, April.
    5. Tomasson, Gunnar & Bezemer, Dirk J, 2010. "What is the Source of Profit and Interest? A Classical Conundrum Reconsidered," MPRA Paper 20320, University Library of Munich, Germany.
    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. Bruun, Charlotte & Heyn-Johnsen, Carsten, 2009. "The paradox of monetary profits: an obstacle to understanding financial and economic Crisis?," Economics Discussion Papers 2009-52, Kiel Institute for the World Economy (IfW Kiel).
    8. John Smithin, 1994. "Controversies In Monetary Economics," Books, Edward Elgar Publishing, number 412.
    9. Kakarot-Handtke, Egmont, 2011. "The pure logic of value, profit, interest," MPRA Paper 30853, University Library of Munich, Germany.
    10. Keen, Steve, 2010. "Solving the paradox of monetary profits," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-32.
    11. Marcello Messori & Alberto Zazzaro, 2005. "Single-Period Analysis: Financial Markets, Firms’ Failures and Closure of the Monetary Circuit," Palgrave Macmillan Books, in: Giuseppe Fontana & Riccardo Realfonzo (ed.), The Monetary Theory of Production, chapter 7, pages 111-123, Palgrave Macmillan.
    12. Kakarot-Handtke, Egmont, 2012. "Taxes, profits, and employment: a structural axiomatic analysis," MPRA Paper 43581, University Library of Munich, Germany.
    13. Kakarot-Handtke, Egmont, 2011. "Keynes’s missing axioms," MPRA Paper 32742, University Library of Munich, Germany, revised 11 Aug 2011.
    14. Kakarot-Handtke, Egmont, 2011. "Squaring the investment cycle," MPRA Paper 32895, University Library of Munich, Germany.
    15. Kakarot-Handtke, Egmont, 2011. "Trade, productivity, income, and profit: the comparative advantage of structural axiomatic analysis," MPRA Paper 43872, University Library of Munich, Germany, revised 18 Jan 2012.
    16. Kakarot-Handtke, Egmont, 2011. "Primary and secondary markets," MPRA Paper 32996, University Library of Munich, Germany.
    17. Louis-Philippe Rochon, 2005. "The Existence of Monetary Profits within the Monetary Circuit," Palgrave Macmillan Books, in: Giuseppe Fontana & Riccardo Realfonzo (ed.), The Monetary Theory of Production, chapter 8, pages 125-138, Palgrave Macmillan.
    18. Louis-Philippe Rochon & Sergio Rossi (ed.), 2003. "Modern Theories of Money," Books, Edward Elgar Publishing, number 2506.
    19. Egmont Kakarot-Handtke, 2012. "The Common Error of Common Sense: An Essential Rectification of the Accounting Approach," Economics Working Paper Archive wp_731, Levy Economics Institute.
    20. T.A. Boylan & P.F. O'Gorman, 2007. "Axiomatization And Formalism In Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 21(3), pages 426-446, July.
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    Cited by:

    1. Kakarot-Handtke, Egmont, 2012. "Why Post Keynesianism is not yet a science," MPRA Paper 43171, University Library of Munich, Germany.
    2. Kakarot-Handtke, Egmont, 2014. "Onblog Economics Muddle Busting," MPRA Paper 60543, University Library of Munich, Germany.
    3. Kakarot-Handtke, Egmont, 2012. "General formal foundations of the virtuous deficit–profit symmetry and the vicious debt deflation," MPRA Paper 42912, University Library of Munich, Germany.
    4. Kakarot-Handtke, Egmont, 2011. "Trade, productivity, income, and profit: the comparative advantage of structural axiomatic analysis," MPRA Paper 43872, University Library of Munich, Germany, revised 18 Jan 2012.

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    More about this item

    JEL classification:

    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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