Towards an Explanation of Credit Money Financial Innovation Jan Kregel

“The paper should support the futility of the classical attempt to provide a physical description of money. In the tradition of Mitchell Innes, the characteristic of money that is common to all monetary systems is the provision of liquidity. This accounts for the historical record in which various types of monetary system required different liquidity mechanisms or money in order to support capital accumulation. It also suggests that different solutions will have different impacts on financial and economic stability.”

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* Jan Kregel is director of research at the Levy Economics Institute, director of the Levy Institute master’s program in economic theory and policy.

Reference: Fifth Thomas Guggenheim Conference in the History of Economic Thought: Financial Instability, Market Disruptions and Macroeconomics Lessons from Economic History and the History of Economic Thought Accademia Nazionale dei Lincei 17-18 December 2019.