Money in Motion

In its analysis of money, contemporary economics has focused on money’s function as a store of value, neglecting its role as a medium of circulation. When circulation is put center stage, it becomes apparent that the supply of money does indeed adapt to the needs of trade, and it does so in myriad ways that are often 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 coordinated with its function as a store of value, and both must be coordinated with finance. Failure in coordination can lead to instability. The essays in this volume, by internationally renowned economists, provide original and contrasting analyses of these issues, presenting the points of view of the American Post-Keynesian approach on the one hand and the French circulation school on the other.