Endogenous money : a note on some Post-Keynesian controversies

Keynes's theory of liquidity preference sought to illuminate the essential properties of money under the conditions of uncertainty that often lead to involuntary unemployment. Subsequent Post-Keynesian literature built upon this concept to show that a deregulated financial system could induce phases of endemic financial instability and crises. Keynes's finance motive provides an important starting point in Post- Keynesian theories of endogenous money. This article examines the controversies between two major contending analytical approaches, the Horizontalist and Structuralist schools.