1. Money has three functions: it is a store of value, a unit of account, and a medium of exchange. As a store of value, money provides a way to transfer purchasing power from the present to the future. As a unit of account, money provides the terms in which prices are quoted and debts are recorded. As a medium of exchange, money is what we use to buy goods and services. 2. Fiat money is establi...

Any recession by definition is associated with an excessive liquidity preference. An ex ante excess supply of goods and services, i.e. the demand for goods and services falling short of the base output at the base prices corresponding to that output, which is what a recession is, must be associated with an ex ante excess demand for money at that output and prices. This is simply Walras’ Law. Th...

Theories on the relationship between money and inflation had largely been shaped around the positive relationship and money causality for inflation before the Post-Keynesians. Since the 1980s, this idea emerged that there might be no correlation between money growth and inflation. In the case of existence, the causality is reversed, so money is endogenous somehow. However, practically there is ...

T he key role of government policies in the process of development has long been recognized. The recent availability of quality data has led to quantitative analyses of the effect such policies have on development. Most of the renewed research effort on this front, both theoretical and empirical, has emphasized the relationship between fiscal policy and the paths of development of countries. 1 ...