The Hierarchy of Money

The Jerome Levy Economics Institute WP No. 231

25 Pages Posted: 8 Jun 1998

See all articles by Stephanie Bell

Stephanie Bell

University of Missouri at Kansas City - Economics

Date Written: April 1998

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.

JEL Classification: E40

Suggested Citation

Bell, Stephanie A., The Hierarchy of Money (April 1998). The Jerome Levy Economics Institute WP No. 231. Available at SSRN: https://ssrn.com/abstract=96845 or http://dx.doi.org/10.2139/ssrn.96845

Stephanie A. Bell (Contact Author)

University of Missouri at Kansas City - Economics ( email )

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