ABSTRACT
Neoclassical theory, the dominant paradigm in economics, treats money as a good with unique demand and supply functions. This characterisation separates money from the rest of the economy to preserve (essentially nonmonetary) equilibrium conditions. Starting with Marx’s Capital and Keynes’s General Theory, heterodox alternatives have all understood that money is directly linked with economic activity and that its presence in production and exchange is incompatible with equilibrium. The Marxist approach (De Brunhoff, 1971, 1979) analyses money as the quintessential form of capital. Post-Keynesians (Davidson, 1978) emphasise the strategic role of money as the most liquid asset. Régulation theory has tried to connect these two traditions and then apply the synthesis to a systematic analysis of the monetary process in advanced capitalist economies with highly developed financial institutions and markets. This effort has given us a new look at money’s role in our society.
