Essentials of Constructive Heterodoxy: Money, Credit, Interest

Abstract

The goal of theoretical economics is to explain how the monetary economy works. The fatal methodological defect of Orthodoxy is that it is based on behavioral axioms. Yet, no specific behavioral assumption whatever can serve as a starting point for economic analysis. From this follows for Constructive Heterodoxy that the subjective axiomatic foundations have to be replaced. This amounts to a paradigm shift. Nobody can rest content with a pluralism of false theories. Based on a set of objective axioms all economic conceptions have to be reconstructed from scratch. In the following this is done for the theory of money.

Keywords: new framework of concepts, structure-centric, Structural Law of Supply and Demand, stock of money, monetary profit, transaction unit, banking unit

JEL Classification: B59, E10