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Money, "finance" and interest
[Monnaie, "finance" et intérêt]

Author

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  • Jean-Luc Bailly

    (LATEC - Laboratoire d'Analyse et de Techniques Economiques [UMR 5601] - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The purpose of this paper is to show that there is no such thing as a pure money interest in the usual meaning of the phrase, that is, interest bearing on pure bank money. Basically, money cannot bear interest because it is not a net asset. This does not however imply that banks cannot charge interest on liquidities they have created. The concept of "finance" brings to light the process through which a liquid capital owned by the banks is formed in the economy. It then becomes clearer that what is commonly called "money interest" paid to banks is in fact a macroeconomic cost of production and therefore a net asset for the whole of the economy, including the banks.

Suggested Citation

  • Jean-Luc Bailly, 1993. "Money, "finance" and interest [Monnaie, "finance" et intérêt]," Working Papers hal-01526962, HAL.
    • Handle: RePEc:hal:wpaper:hal-01526962
    Note: View the original document on HAL open archive server: https://hal.science/hal-01526962
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    References listed on IDEAS

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    1. André Lapidus, 1987. "La propriété de la monnaie : doctrine de l'usure et théorie de l'intérêt," Revue Économique, Programme National Persée, vol. 38(6), pages 1095-1110.
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    Keywords

    banking; finance; taxation;
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