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The Money Supply Process: How Much Progress Since C. A. Phillips Bank Credit?

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Cohen, J. The Money Supply Process: How Much Progress Since C. A. Phillips Bank Credit?. Credit and Capital Markets – Kredit und Kapital, 17(3), 333-351. https://doi.org/10.3790/ccm.17.3.333
Cohen, Jacob "The Money Supply Process: How Much Progress Since C. A. Phillips Bank Credit?" Credit and Capital Markets – Kredit und Kapital 17.3, 1984, 333-351. https://doi.org/10.3790/ccm.17.3.333
Cohen, Jacob (1984): The Money Supply Process: How Much Progress Since C. A. Phillips Bank Credit?, in: Credit and Capital Markets – Kredit und Kapital, vol. 17, iss. 3, 333-351, [online] https://doi.org/10.3790/ccm.17.3.333

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The Money Supply Process: How Much Progress Since C. A. Phillips Bank Credit?

Cohen, Jacob

Credit and Capital Markets – Kredit und Kapital, Vol. 17 (1984), Iss. 3 : pp. 333–351

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Jacob Cohen, Pittsburgh

References

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  7. Cohen, Jacob: “A Creditist Approach to Monetary Theory,” Nebraska Journal of Economics and Business, 21 (Spring 1982 a), pp. 2 - 25.  Google Scholar
  8. Cohen, Jacob: “Beyond IS-LM,” Malayan Economic Review, 27 (April 1982b), pp. 1 - 14.  Google Scholar
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  35. Sinai, Allen: “The Integration of ‘Financial Instability’ in Large-Scale Macroeconomic Models; Theory, Practice, Problems,” paper presented at Midwest Economic Association meetings (Chicago, Ill., April 1975).  Google Scholar
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  37. Tobin, James: “The Role of Money in National Economic Policy,” in Federal Reserve Bank of Boston, Controlling Monetary Aggregates, Conference Series No.1, (Boston, 1969), pp. 21ff.  Google Scholar
  38. Tobin, James and William C. Brainard: “Financial Intermediaries and the Effectiveness of Monetary Controls,” Proceedings, American Economic Review, LIII (May, 1963), pp. 383 - 400.  Google Scholar
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  41. Axilrod, Stephen H.: “Monetary Policy, Money Supply and the Federal Reserve’s Operating Procedures,” Federal Reserve Bulletin (January 1982), pp. 13 – 24.  Google Scholar
  42. Brunner, Karl: “The Control of Monetary Aggregates,” in Federal Reserve Bank of Boston, Controlling Monetary Aggregates, III, Conference Series No. 23 (Boston, 1980), pp. 1ff.  Google Scholar
  43. Brunner, Karl and Allan H. Meltzer: “An Aggregate Theory for a Closed Economy,” In Jerome L. Stein, ed., Monetarism (Amsterdam, Holland, 1976), Chap. 2.  Google Scholar
  44. Carlson, John B.: “The Monetary Base, the Economy and Monetary Policy,” Federal Reserve Bank of Cleveland, Economic Review (Spring, 1981), pp. 2ff.  Google Scholar
  45. Cohen, Jacob: “The Treatment of the Means of Payment in Social Accounting,” Journal of Finance XII (December, 1957), pp. 423 – 427.  Google Scholar
  46. Cohen, Jacob: “Tieing Loose Ends in Monetary Theory in a Moneyflows Framework,” Rivista Internazionale di Science Economiche e Commerciali XXI (n. 3, 1974), pp. 246 – 276.  Google Scholar
  47. Cohen, Jacob: “A Creditist Approach to Monetary Theory,” Nebraska Journal of Economics and Business, 21 (Spring 1982 a), pp. 2 – 25.  Google Scholar
  48. Cohen, Jacob: “Beyond IS-LM,” Malayan Economic Review, 27 (April 1982b), pp. 1 – 14.  Google Scholar
  49. Cohen, Jacob: “The Saving-Leakage Effect of Financial Intermediation,” Journal of Post Keynesian Economics, (Fall, 1982c), pp. 153 – 156. -  Google Scholar
  50. Copeland, Morris A.: A Study of Moneyflows in the United States, (New York, 1952).  Google Scholar
  51. Friedman, Benjamin M.: “Using a Credit Aggregate to Implement Monetaryis même réalisables. Policy in the Financial Environment of the Future,” in Federal Reserve Bank of Kansas City, Monetary Policy Issues in the 1980s (Jackson Hole, Wyoming, August 1982), pp. 223 – 248.  Google Scholar
  52. Friedman, Milton: “The Quantity Theory of Money – A Restatement” in M. Friedman, ed., Studies in the Quantity Theory of Money (Chicago, Ill., 1956), pp. 3 – 21.  Google Scholar
  53. Goodfriend, Marvin: “A Model of Money Stock Determination with Loan Demand and a Banking System Balance Sheet Constraint,” Federal Reserve Bank of Richmond, Economic Review, 68 (January/February, 1982), pp. 3 – 16.  Google Scholar
  54. Gramley, Lyle E. and Samuel B. Chase, Jr.: “Time Deposits in Monetary Analysis,” Federal Reserve Bulletin (October, 1865), reprinted in Karl Brunner, ed., Targets and Indicators of Monetary Policy (San Francisco, Cal., 1969), pp. 219ff.  Google Scholar
  55. Gurley, J. G. and E. S. Shaw: “Financial Aspects of Economic Development,” American Economic Review, XLV (September, 1955), pp. 515 ff.  Google Scholar
  56. Gurley, J. G. and E. S. Shaw: Money in a Theory of Finance (Washington, D.C., 1960).  Google Scholar
  57. Harris, Laurence: Monetary Theory (New York, 1981).  Google Scholar
  58. Hendershott, Patric H.: Understanding Capital Markets, Volume 1: A Flow-of-Funds Financial Model (Lexington, Mass., 1977).  Google Scholar
  59. Higgins, Bryon and Jon Faust: “Velocity Behavior of the New Monetary Aggregates,” Federal Reserve Bank of Kansas City, Economic Review (September – October, 1981), pp. 3 -17.  Google Scholar
  60. Judd, John P. and John L. Scadding: “Liability Management, Bank Loans and Deposit ‘Market’ Disequilibrium,” Federal Reserve Bank of San Francisco, Economic Review (Summer 1981), pp. 21 – 44.  Google Scholar
  61. Judd, John P. and John L. Scadding: “Dynamic Adjustment in the Demand for Money: Tests of Alternative Hypotheses,” Federal Reserve Bank of San Francisco, Economic Review (Fall, 1982), pp. 3 – 18.  Google Scholar
  62. Kareken, John H.: “Commercial Banks and the Supply of Money: A Market-Determined Depand Deposit Rate,” Federal Reserve Bulletin (October, 1967), pp. 1699 – 1712.  Google Scholar
  63. Modigliani, Franco and Lucas D. Papademos: “The Structure of Financial Markets and the Monetary Mechanism,” Federal Reserve Bank of Boston, Controlling Monetary Aggregates, III, Conference Series No. 23 (Boston, 1980), pp. 111 – 155.  Google Scholar
  64. Patinkin, Don: “Money and Wealth: A Review Article,” Journal of Economic Literature, VII (December, 1969), pp. 1140 – 1160.  Google Scholar
  65. Pesek, Boris P.: “Bank’s Supply Function and the Equilibrium Quantity of Money,” Canadian Journal of Economics, III (August 1970), pp. 358ff.  Google Scholar
  66. Pesek, Boris P.: “Monetary Theory in the Post-Robertson ‘Alice in Wonderland’ Era,” Journal of Economic Literature, XIV (September 1976), pp. 856ff.  Google Scholar
  67. Pesek, Boris P.: “A Rejoinder,” Journal of Economic Literature, XV (September 1977a), pp. 856 ff.  Google Scholar
  68. Pesek, Boris P.: “Reply to Professor Dean,” Journal of Economic Literature, XV (September, 1977b), pp. 924ff.  Google Scholar
  69. Pesek, Boris P. and Thomas R. Saving: Money, Wealth and Economic Theory (New York, 1967).  Google Scholar
  70. Pesek, Boris P. and ThomasR. Saving: The Foundations of Money and Banking (New York, 1968).  Google Scholar
  71. Phillips, C. A.: Bank Credit (New York, 1924).  Google Scholar
  72. Saving, Thomas R.: “A Theory of the Money Supply with Competitive Banking,” Journal of Monetary Economics, 3 (July, 1977), pp. 289 – 303.  Google Scholar
  73. Silver, Andrew A.: “Choosing Among Narrow and Broad Monetary Aggregates: An Evaluation of ‘The Structure of Financial Markets and the Monetary Mechanism’ by Modigliani and Papademos,” Federal Reserve Bank of New York, Research Paper No. 8110 (June, 1981).  Google Scholar
  74. Simpson, Thomas D., et al.: “Recent Revisions in the Money Stock: Benchmark, Seasonal Adjustment and Calculation of Shift-Adjusted M1-B,” Federal Reserve Bulletin (July, 1981), pp. 539 – 42.  Google Scholar
  75. Sinai, Allen: “The Integration of ‘Financial Instability’ in Large-Scale Macroeconomic Models; Theory, Practice, Problems,” paper presented at Midwest Economic Association meetings (Chicago, Ill., April 1975).  Google Scholar
  76. Tobin, James: “Commercial Banks as Creators of ”Money’,”‚» in Deane Carson, ed., Banking and Monetary Studies (Homewood, Il., 1963), Chap. 11.  Google Scholar
  77. Tobin, James: “The Role of Money in National Economic Policy,” in Federal Reserve Bank of Boston, Controlling Monetary Aggregates, Conference Series No.1, (Boston, 1969), pp. 21ff.  Google Scholar
  78. Tobin, James and William C. Brainard: “Financial Intermediaries and the Effectiveness of Monetary Controls,” Proceedings, American Economic Review, LIII (May, 1963), pp. 383 – 400.  Google Scholar
  79. Towey, Richard E.: “Money Creation and the Theory of the Banking Firm,” Journal of Finance, XXIX (March 1974), pp. 57 – 72.  Google Scholar
  80. White, William H.: “The Case For and Against ‘Disequilibrium’ Money,” International Monetary Fund, Staff Papers, 28 (September, 1981), pp. 534 – 572.  Google Scholar

Abstract

The Money Supply Process: How Much Progress Since C. A. Phillips’ Bank Credit?

The money supply process is best analyzed in the context of a general equilibrium framework based on the two-endedness of market transactions. Historically, the focus has been the reserve and money markets with support of the New View and traditional multiplier analysis, respectively. A generalized analysis would feature additional markets – most importantly, the bank credit market. The emphasis placed on bank credit more than sixty years ago by C. A. Phillips is reflected in recent modelbuilding. In these models, deposit supply shocks associated with changes in bank credit are responsible for “disequilibrium money.” The paradox of the banking system and the individual bank posed by Phillips can be resolved by treating the means of payment as the output of banks rather than as an input. As a seller of demand deposits, the individual bank becomes the microcosm of the banking system.