Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90156
Authors: 
de la Fonteijne, Marcel
Year of Publication: 
2014
Series/Report no.: 
Economics Discussion Papers 2014-3
Abstract: 
In order to understand from where the profits or monetary profits of capitalists and firms emerge the author examined the phrase of Marx, 'Die Gesamtklasse der Kapitalisten kann nichts aus der Zirkulation herausziehen, was nicht vorher hineingeworfen war.' (The class of capitalists cannot extract from the circulation, what has not previously been thrown in.) Also Keen studied the monetary paradox and contrary to circuitists he came to the conclusion that capitalists can make monetary profit with a possibility to earn enough to repay their debt and with positive balances for all actors. The author will prove that Keen made a fundamental mistake and is using the Stock Flow Consistency Principle in an inconsistent way by combining it with behavior equations in a dynamic model. So the solution presented here is not only showing that the numbers are incorrect but the method itself. This resolves a contraction between Keen and circuitists and implies that, in a Wicksellian pure credit economy, it remains impossible to gain a monetary profit for all actors. More precisely that the total sum of monetary profit over all actors is zero.
Subjects: 
monetary profit paradox
stock flow consistency
circuit theory
endogenous money
Wicksellian pure credit economy
social norms
cognitive costs
laboratory experiments
JEL: 
C50
C60
E11
E12
E20
E25
E44
G00
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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