Monetary Policy in an Economy with Endogenous Credit Money

Although quite a lot has now been written about money and credit by Post Keynesian authors, the literature on the consequent monetary policy has been rather sparse. The objectives of this chapter are to gather the little that has been written on Post Keynesian monetary policy, and to identify a few general guidelines around which Post Keynesians could agree when it comes to non-specific monetary policy recommendations. In the following, the term Post Keynesian is meant to cover contributions on money and inflation from the so-called American Post Keynesians, as well as those of the Cambridge (England) Keynesians, and those of the neo-Ricardians. It will be obvious that the views of the radical school are quite similar. I shall start by establishing how I view the links which exist between circuit theory and Post Keynesian economics.