Money and generalized exchange: A critical look at Neo-Walrasian theory
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| Format: | Artículo científico |
| Language: | en |
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Universidad Nacional Autónoma de México
2015
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| author | Esteban Pérez Caldentey |
| author_facet | Esteban Pérez Caldentey |
| contents | Money and generalized exchange: A critical look at Neo-Walrasian theory Esteban Pérez Caldentey Economía y Finanzas Neo E13 E52 E31 Existence The proof of existence of market clearing equilibrium is the cornerstone of Neo-Clas-sical theory. While it is generally portrayed as a barter framework, the proof actually assumes an accepted system of credits and debits; a system of privately issued IOU’s, or what is the same thing commitments by private agents to deliver a certain quantity of a given commodity at a given equilibrium price. In other words, the proof presupposes the existence of ‘inside money’. Yet a system of generalized exchange with pure inside money is not compatible with the main principles of Neo-Classical monetary theory including that inflation is always and everywhere a monetary phenomenon, the exogeneity of money and also the neutrality of money. This explains the importance and necessity of introducing ‘outside money’ in general equilibrium. Focussing mainly on Patinkin’s ‘invalid dichotomy’ and the real balance effect, and to a lesser extent, on overlapping generation models, I try to show that these attempts have been unsuccessful. In both cases the integration of monetary and value theory amount to collapsing all individuals into a single one. This negates the very economic problem (i.e., multiple exchanges) that gave rise to general equilibrium theory and to the impending requirement to prove the existence of market clearing equilibrium. 2015 artículo científico 0185-1667 https://www.redalyc.org/articulo.oa?id=60141352004 https://www.redalyc.org/journal/601/60141352004/ https://www.redalyc.org/journal/601/60141352004/html/ https://www.redalyc.org/journal/601/60141352004/60141352004.epub https://www.redalyc.org/journal/601/60141352004/movil en http://www.redalyc.org/revista.oa?id=601 Investigación Económica application/pdf Universidad Nacional Autónoma de México Investigación Económica (México) Num.293 Vol.LXXIV |
| format | Artículo científico |
| id | redalyc_60141352004 |
| institution | Redalyc |
| language | en |
| publishDate | 2015 |
| publisher | Universidad Nacional Autónoma de México |
| spellingShingle | Money and generalized exchange: A critical look at Neo-Walrasian theory Esteban Pérez Caldentey Economía y Finanzas Neo E13 E52 E31 Existence Money and generalized exchange: A critical look at Neo-Walrasian theory Esteban Pérez Caldentey Economía y Finanzas Neo E13 E52 E31 Existence The proof of existence of market clearing equilibrium is the cornerstone of Neo-Clas-sical theory. While it is generally portrayed as a barter framework, the proof actually assumes an accepted system of credits and debits; a system of privately issued IOU’s, or what is the same thing commitments by private agents to deliver a certain quantity of a given commodity at a given equilibrium price. In other words, the proof presupposes the existence of ‘inside money’. Yet a system of generalized exchange with pure inside money is not compatible with the main principles of Neo-Classical monetary theory including that inflation is always and everywhere a monetary phenomenon, the exogeneity of money and also the neutrality of money. This explains the importance and necessity of introducing ‘outside money’ in general equilibrium. Focussing mainly on Patinkin’s ‘invalid dichotomy’ and the real balance effect, and to a lesser extent, on overlapping generation models, I try to show that these attempts have been unsuccessful. In both cases the integration of monetary and value theory amount to collapsing all individuals into a single one. This negates the very economic problem (i.e., multiple exchanges) that gave rise to general equilibrium theory and to the impending requirement to prove the existence of market clearing equilibrium. 2015 artículo científico 0185-1667 https://www.redalyc.org/articulo.oa?id=60141352004 https://www.redalyc.org/journal/601/60141352004/ https://www.redalyc.org/journal/601/60141352004/html/ https://www.redalyc.org/journal/601/60141352004/60141352004.epub https://www.redalyc.org/journal/601/60141352004/movil en http://www.redalyc.org/revista.oa?id=601 Investigación Económica application/pdf Universidad Nacional Autónoma de México Investigación Económica (México) Num.293 Vol.LXXIV |
| title | Money and generalized exchange: A critical look at Neo-Walrasian theory |
| topic | Economía y Finanzas Neo E13 E52 E31 Existence |
| url | https://www.redalyc.org/articulo.oa?id=60141352004 https://www.redalyc.org/journal/601/60141352004/ https://www.redalyc.org/journal/601/60141352004/html/ https://www.redalyc.org/journal/601/60141352004/60141352004.epub https://www.redalyc.org/journal/601/60141352004/movil |