Routledge Handbook of Macroeconomic Methodology

14 Money and macroeconomic methodology

Claude Gnos

DOI: 10.4324/9781315745992-17

Introduction

A traditional perspective, that is still predominant in modern textbooks and macroeconomic models, contends that money was invented and continues to be used to facilitate exchanges in a market economy. This perspective ranks money as a useful but normally neutral instrument in economic transactions. It notably supports the old quantity theory of money that Friedman and his followers have intended to revamp from the mid-20th century.

However, this view has been questioned for a long time by anthropological history (see Innes 1913). It is also inconsistent with the actual role of money in the capitalist economy. This is a point that Keynes, in his ...