Functional Finance: What, Why, and How?

Levy Economics Institute Working Paper No. 287

15 Pages Posted: 2 May 2000

See all articles by Stephanie Bell

Stephanie Bell

University of Missouri at Kansas City - Economics

Date Written: November 1999

Abstract

The purpose of this paper is threefold. First, the theory of functional finance, as explicated by its originator, Abba P. Lerner, is put forward. Second, the reader is introduced to the use, standard in money and banking texts, of T-account balance sheet entries. Although no important conclusions will rest solely on the reader's ability to cope with these entries, comfort with their use will ease the exposition. An appendix therefore is provided to assist those not yet exposed to this method of recording balance sheet changes and for those who merely wish to refresh themselves. The third purpose of the paper is to demonstrate the need for policies governed by the principles of functional finance.

JEL Classification: G10

Suggested Citation

Bell, Stephanie A., Functional Finance: What, Why, and How? (November 1999). Levy Economics Institute Working Paper No. 287. Available at SSRN: https://ssrn.com/abstract=199971 or http://dx.doi.org/10.2139/ssrn.199971

Stephanie A. Bell (Contact Author)

University of Missouri at Kansas City - Economics ( email )

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