The primary aim of this paper is not to comment Walras’ theories of capitalization and money, but to restate them avoiding ambiguities and inconsistencies. Two other groups of agents are introduced together with consumers and producers: the owners of fixed capital goods, who finance their purchases by issuing securities, and the owners of circulating capital goods, who finance their purchases by issuing money. The principal monetary implications are: there are two quantitative relations (which concern respectively transactions during the period and transactions at the end of the period); the theory of money is integrated with the theories of exchange, production and capitalization; securities and money are a veil; bank deposits can be introduced in place of paper money; and the length of the period matters.
A Restatement of Walras' Theories of Captalisation and Money
MONTESANO, ALDO MARIA
2008
Abstract
The primary aim of this paper is not to comment Walras’ theories of capitalization and money, but to restate them avoiding ambiguities and inconsistencies. Two other groups of agents are introduced together with consumers and producers: the owners of fixed capital goods, who finance their purchases by issuing securities, and the owners of circulating capital goods, who finance their purchases by issuing money. The principal monetary implications are: there are two quantitative relations (which concern respectively transactions during the period and transactions at the end of the period); the theory of money is integrated with the theories of exchange, production and capitalization; securities and money are a veil; bank deposits can be introduced in place of paper money; and the length of the period matters.
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