Is the theory of money that underlies most modern macroeconomics well-grounded? What determines the value of a currency, and how is the state's power over its currency related to its ability to stabilize prices and employment? Charles Goodhart's classic paper 'The Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas' which first raised these questions is reprinted here, and the distinguished authors expand its line of argument and comment on its central themes. The issues discussed are of fundamental importance in contemporary monetary theory and policy. The State, the Market and the Euro presents two sharply contrasting theories of money - Chartalist and Metallist - and the resulting equally sharply contrasting approaches to macroeconomic policy. Academic monetary, financial and political economists will find this book of great interest as will policymakers, financial analysts and journalists.

This ambitious book seeks both to revive and revise the idea of 'functional finance'. Followers of this doctrine believe that government budgets should concentrate solely on their macroeconomic impact on the economy, rather than reflecting a concern for sound finance and budgetary discipline. Reinventing Functional Finance examines the origins of this idea and then considers it in a modern context. The authors explore the concept of NAIRU and argue that modern economies can operate at the level of full employment without provoking unmanageable inflation. They also contend that budget deficits do not have the deleterious effects commonly ascribed to them; the belief that they do rests on a misunderstanding of modern money. In this context, they highlight the relevance of Abba Lerner's famous dictum, 'money is a creature of the State'. The authors also debate the merits of various proposals for 'Employer of Last Resort' programs, which combine automatic stabilizers with the buffer stock principle. The book boasts an array of eminent contributors which includes, amongst others, James Duesenberry, Robert Eisner, Robert Heilbroner, Richard Musgrave, Edward Nell and Randall Wray. Financial economists, politicians, policymakers and bankers will welcome this provocative and refreshing book which challenges established economic thinking.

This is a book macroeconomists were waiting for - a lucid history of macroeconometric model building. A must read.' - Willi Semmler, New School for Social Research, US'The authors have succeeded in orchestrating a lively debate over the scientific foundations of structural econometrics. Their book deserves a broad readership.' - From the foreword by Lawrence R. Klein 'The wide range of issues brilliantly discussed, the entertaining and accessible language, the sharpness of the authors' judgement and the constructive critical mood makes this book recommended reading for anyone who feels uneasy with the empirical scope and policy significance of standard econometric methods and of mainstream economic models.' - Alessandro Vercelli, University of Siena, Italy This challenging and original book takes a fresh, innovative look at econometrics, and re-examines the scientific standing of structural econometrics as developed by the founders (Frisch and Tinbergen) and extended by Haavelmo and the Cowles modellers (particularly Klein) during the period 1930-1960. The authors begin by rethinking the scientific foundations of structural econometrics, offering a way around the problem of induction that also justifies the assumption of a data generating mechanism', and of ways to model this. They go on to explain how current critiques of the methodological foundations of structural econometrics are direct consequences of implicitly accepted but seriously flawed elements in neoclassical thinking. In the final part they present their distinctive methodological contribution: a blend of fieldwork and conceptual analysis designed to ensure that their models are well grounded in reality, and at the same time, conceptually coherent as well as statistically adequate. In so doing, they outline a number of elements that will be needed to develop a 'good' macroeconometric model of an advanced economy. Rational Econometric Man will prove a stimulating and thought-provoking read for scholars and researchers in the field of economics, and, more specifically, heterodox economics. Contents: Foreword by Lawrence R. Klein Introduction Part I: From Rational Economic Man to Rational Econometric Man 1. Re-reading Hollis and Nell 2. Haavelmo Reconsidered as Rational Econometric Man 3. Induction and the Empiricist Account of General Laws 4. Variables, Laws and Induction I: Are There Laws of Nature? 5. Variables, Laws and Induction II: Scientific Variables and Scientific Laws in Economics 6. The Concept of the 'Model' and the Methodology of Model Building Part II: The Critiques and the Foundations 7. Debating the Foundations: A New Perspective? 8. Scientific Issues in Structural Econometrics 9. Haavelmo and Beyond: Probability, Uncertainty, Specification and Stochasticism Part III: Structural Econometrics in its Place: Mapping New Directions 10. Conceptual Analysis, Fieldwork and the Methodology of Model Building 11. Working with Open Models: Lawlike Relations and an Uncertain Future Conclusion References Index

This ambitious book seeks both to revive and revise the idea of 'functional finance'. Followers of this doctrine believe that government budgets should concentrate solely on their macroeconomic impact on the economy, rather than reflecting a concern for sound finance and budgetary discipline. Reinventing Functional Finance examines the origins of this idea and then considers it in a modern context. The authors explore the concept of NAIRU and argue that modern economies can operate at the level of full employment without provoking unmanageable inflation. They also contend that budget deficits do not have the deleterious effects commonly ascribed to them; the belief that they do rests on a misunderstanding of modern money. In this context, they highlight the relevance of Abba Lerner's famous dictum, 'money is a creature of the State'. The authors also debate the merits of various proposals for 'Employer of Last Resort' programs, which combine automatic stabilizers with the buffer stock principle. The book boasts an array of eminent contributors which includes, amongst others, James Duesenberry, Robert Eisner, Robert Heilbroner, Richard Musgrave, Edward Nell and Randall Wray. Financial economists, politicians, policymakers and bankers will welcome this provocative and refreshing book which challenges established economic thinking.

For the last century, economic analysis has been wedded to the idea of equilibrium, in spite of the evident fact that most economic relationships are in flux. The theory of transformational growth in this work replaces equilibrium with history. The role of the market is not to allocate resources, but to generate innovations, which are 'selected' by competition in an evolutionary process. These innovations in turn change the way markets work and how they adjust, thus creating new problems and new kinds of pressures to innovate. Different historical periods can be distinguished with a new one perhaps on the horizon. In each a distinctive style of technology prevails, associated with corresponding institutions and patterns of market behavior. The core relationships provide the foundations for a theory of monetary circulation, which makes possible a revised Keynesian approach, based on Classical foundations.

This collection of essays is designed to illustrate the variety, complexity and power of non-neoclassical economic thinking. The essays define the fundamental questions differently, employ different analytical tools and arrive at different conclusions. The two strands of non-neoclassical thinking that occupy most of the book are the neo-Keynesian and the neo-Marxian. The bulk of the book is composed of essays on microeconomics, macroeconomics, trade, comparative systems and welfare, with an unusual section on property rights and social hierarchy.

For the last century, economic analysis has been wedded to the idea of equilibrium, in spite of the evident fact that most economic relationships are in flux. The theory of transformational growth in this work replaces equilibrium with history. The role of the market is not to allocate resources, but to generate innovations, which are 'selected' by competition in an evolutionary process. These innovations in turn change the way markets work and how they adjust, thus creating new problems and new kinds of pressures to innovate. Different historical periods can be distinguished with a new one perhaps on the horizon. In each a distinctive style of technology prevails, associated with corresponding institutions and patterns of market behavior. The core relationships provide the foundations for a theory of monetary circulation, which makes possible a revised Keynesian approach, based on Classical foundations.

This volume provides a treatment of "endogenous money" and its relationship to finance. It compares American post-Keynesian and French circulation school as two ways of analyzing money in the economy.;In analyzing money, contemporary economics has focused its attention on money's function as a store of value, neglecting its role as medium of circulation. When circulation is put centre-stage, it becomes apparent that the supply of money does indeed adapt to the needs of trade - and does so in many different ways, often ways that are difficult for a central bank to control, because they reflect the responses of banks and other financial institutions to market incentives. But money's role in circulation must be co-ordinated with its store of value function, and both with finance. Failure here can lead to instability.;The essays in this volume cover these issues in contrasting analyses, presenting the American post-Keynesian perspective, on the one hand, and the point of view of the French circulation school, on the other.

A collection of essays which develop Professor Nell's economic theory of transformational growth. The author's previous titles include "Free Market Conservatism: A Critique of Theory and Practice" and "Beyond the Steady State: A Revival of Growth Theory".

An examination of the role of Nicholas Kaldor within economics. Topics covered range from Kaldor's discovery of the Von Neumann input-output model, to cyclical growth in a Kaldorian model, to Nicholas Kaldor as advocate of commodity reserve currency.

This collection of essays develops Edward Nell's influential theory of transformational growth. Nell sets established concepts such as the classical notion of prices of production and the wage-profit frontier within a significant new framework that illustrates their role in the dynamic evoution of the industrial system from its beginnings in feudalism through the early capitalism of the family firms to the modern system of effective demands and multiplier adjustments. The essays present the method and its relation to the capital critique before developing the main ideas of transformational growth through a series of historical studies culminating in a revised theory of the multiplier. Outlining policies which strongly affirm an expansionist approach, Nell porposes a reconstruction of macroeconimics.