Krugman Meets Marx and Keynes at the Baby-Sitting Co-Op

23 Pages Posted: 7 Apr 2005

See all articles by Yavuz Yasar

Yavuz Yasar

University of Denver

Mark Lautzenheiser

Earlham College - Department of Economics

Date Written: January 2005

Abstract

Paul Krugman tells the story of the Capitol Hill baby-sitting co-op as a means of introducing readers to the economics of recessions. This story, like many others in economics, is a wonderful teaching device in undergraduate courses. We take the story from where Krugman stops and develop it by presenting different aspects of a monetary economy with the help of a graphical analysis. This is done with the introduction of history of economic thought to the curriculum by visiting monetary theories of Karl Marx's Capital (1867) and John Maynard Keynes's A Treatise on Money (1930). The benefit of using these two sources is twofold. First, it is possible to find a common theory in both Marx and Keynes's writings to explain the baby-sitting co-op story. Second, it is possible to move beyond the story and introduce other aspects of a monetary economy such as endogenoity of money, industrial and financial circulation of money, etc. In addition, a graphical framework is developed as teaching aid.

Keywords: Teaching, Money, Marx, Keynes

JEL Classification: A22, B31, E11, E12

Suggested Citation

Yasar, Yavuz and Lautzenheiser, Mark, Krugman Meets Marx and Keynes at the Baby-Sitting Co-Op (January 2005). Available at SSRN: https://ssrn.com/abstract=684425 or http://dx.doi.org/10.2139/ssrn.684425

Yavuz Yasar (Contact Author)

University of Denver ( email )

2201 S. Gaylord St
Denver, CO 80208-2685
United States
303-871-2244 (Phone)

Mark Lautzenheiser

Earlham College - Department of Economics ( email )

801 National Road West
Richmond, IN 47374-1207
United States
765-983-1892 (Phone)
765-983-1207 (Fax)

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