1. Bank lending, interest, and monopoly: Pre-keynesian heterodoxy in macro-monetary dynamics

Abstract

There are two sides to the lending of money: the ‘micro’ and the ‘macro’. The microeconomic side comprises various routines performed by bankers in assessing the profitability of an investment. The macroeconomic side reflects the impact of such institutional banking routines on the rest of the economy. This chapter examines the repercussions of a few generally accepted bank precepts on the overall dynamics of the economic system by unearthing the monetary theory of Silvio Gesell and applying it to three important ‘macro’ scenarios: Schumpeterian innovation, Veblen's absentee ownership and technically productive investment, and Malthus's theory of market gluts.

Citation

Giacomo Preparata, G. and Elliott, J.E. (2000), "1. Bank lending, interest, and monopoly: Pre-keynesian heterodoxy in macro-monetary dynamics", A Research Annual (Research in the History of Economic Thought and Methodology, Vol. 18 Part 1), Emerald Group Publishing Limited, Leeds, pp. 1-41. https://doi.org/10.1016/S0743-4154(00)18021-6