A Classical-Keynes Model of Money and Finance for Transiting Economies

Abstract

Marx stands for ‘classical’ and ‘Keynes’ is represented by the stock-flow-consistent framework of Godley–Cripps–Lavoie. Agriculture proxies for basics in the classical departmental schema and does not dissolve into manufacturing. We establish the primacy of commercial/central bank money in the production and circulation of basics. Financial institutions mediate between savers and investors in the production of capital goods. Finally, corporations can issue shares to underwrite their investment plans. Financialisation is captured by share buybacks. JEL Codes: B52, E12