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The Hierarchy of Money

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  • Stephanie Bell

Abstract

This paper attempts to bring together several of Hyman Minsky's insights in order to suggest a relationship between the State's ability to tax and the money of the economy. Minsky recognized that money represents an IOU or promise to pay and that 'acceptability' is its important feature. He further recognized that the State can play an important role in determining whose IOUs will be accepted (both publicly and privately). I will argue that support for the Chartalist vision of money as a 'creature of the State' can be found in Minsky. Finally, I will apply the Chartalist theory to Minsky's notion of a 'hierarchy of money' in order to suggest that the State determines not only the unit in which all of the monies in the hierarchy are denominated but also influences the positioning of certain monies within the hierarchy.

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  • Stephanie Bell, 1998. "The Hierarchy of Money," Economics Working Paper Archive wp_231, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_231
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    References listed on IDEAS

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    1. L. R. Wray, 1990. "Money and Credit in Capitalist Economies," Books, Edward Elgar Publishing, number 474.
    2. Ofonagoro, Walter I., 1979. "From Traditional to British Currency in Southern Nigeria: Analysis of a Currency Revolution, 1880–1948," The Journal of Economic History, Cambridge University Press, vol. 39(3), pages 623-654, September.
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