Circulation and Effective Demand: A Comment on Nell
Posted: 29 Feb 2008
Date Written: July 2006
Abstract
In a recent paper in this Journal, Ed Nell presented a theory of circulation intended to unify 'the theories of money, production, and effective demand'. The current comment uses a very simple leakage and injection approach to arrive at some of Nell's results. In doing so, we are able to correct a small slip in Nell's original paper. More importantly, with the slip corrected, the money supply and multiplier processes are seen to be one and the same.
Keywords: Circulation, Money, Macroeconomics
Suggested Citation: Suggested Citation
Lautzenheiser, Mark and Yasar, Yavuz, Circulation and Effective Demand: A Comment on Nell (July 2006). Cambridge Journal of Economics, Vol. 30, Issue 4, pp. 651-656, 2006, Available at SSRN: https://ssrn.com/abstract=1095577 or http://dx.doi.org/10.1093/cje/bei108
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