Joan Robinson and Keynes: finance, relative prices and the monetary circuit

Abstract

Joan Robinson's views on credit and money are discussed only rarely. Of late, however, some Post-Keynesians have sought to revive these views, claiming that Robinson was one of the original contributors to the theory of endogenous money, post Keynes. This paper has two objectives. First, it seeks to develop Robinson's views on credit, money and finance and to show that not only did she have a clear understanding of the theory of endogenous money, but that she also held views akin to the theory of the monetary circuit. Second, the paper addresses Robinson's dismissal of the problem of relative prices and the conventional theory of value. Once again, it shows that Robinson's position is connected closely with the model of the monetary circuit as a basis of her theory of accumulation.

Endogenous money: the evolutionary versus revolutionary views

“…This point was indeed well recognized by Joan Robinson (1956). As her views on endogenous money are becoming increasingly considered (see Graziani 1989;Lavoie 1999;Rochon 2001;Gnos and Rochon 2003), we now find evidence that she also was of the opinion that money was endogenous even under the gold-standard system. As a matter of fact, if there were some physical limits imposed by gold mining, banks would simply step in and create the necessary amount of money in order to meet the needs of the economy for a means of final payment.…”

Post Keynesian Theory and Evidence of Money Supply Endogeneity: A Review Essay

“…The concept of monetary circuit as defined by Gnos and Rochon (2003) refers to the firms' successive outlays (for productive factors) and receipts (from sales), and to the resulting formation and cancellation of money incomes. Robinson (1956) mentioned this term in the very first page her book The Accumulation of Capital, as 'the cycle of production and sales'.…”

“…According to Rochon (2001), and Vernengo and Rochon (2001), Robinson endorsed a theory of endogenous money. However, Gnos and Rochon (2003) extended this analysis to show that Robinson (1956) views are also related to the theory of the monetary circuit. In such monetary circuit model, money supply generation (and 'destruction') process is the result of the complexity and the links between three specific causal relationships -banks and firms, firms and workers, and banks and households.…”

İçsel Para Teori̇si̇ Ve Joan Robinson

“…İçsel para teorisinin ortaya çıkışı genellikle, 1959 tarihinde kurulan Radcliffe Komitesinin üyelerinden olan Nicholas Kaldor'un görüşlerine ve Hyman Minsky'nin 1957 tarihli (Minsky, 1957a;Minsky, 1957b) çalışmalarına dayandırılmaktadır. Daha sonra yapılan bazı çalışmalar ise (Rochon, 2001a;Gnos ve Rochon, 2003;Vernengo ve Rochon, 2001), Robinson'un içsel para teorisine daha erken dönemde, oldukça önemli katkılarda bulunduğunu iddia etmektedir.…”