Economics: Current and Future Developments

Volume: 2


Author(s): Maria Alejandra Madi

Pp: 38-57 (20)

DOI: 10.2174/9781681085067117020005

* (Excluding Mailing and Handling)


This chapter aims to present different perspectives on the theory of money. Firstly, we refer to Eugen von Böhm-Bawerk’s theoretical approach developed in the late 1880s that highlights the concept of interest rate in the context of inter-temporal allocation decisions. Then, we consider John Maynard Keynes’s contribution privileges that money is non-neutral and that the rate of interest is a monetary phenomenon. Finally, we include the Keynesian approach developed by James Tobin to monetary issues in bank money and banking strategies in order to clarify the dynamics of banks’ decisions toward profitable assets.

Keywords: rate, Non-neutrality of money, Process of bank money creation.

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