| Abstract: | Endogenous money is widespread in economic theory. The post‐Keynesian contribution is identification of a causal link between bank lending and the money supply. Though driven by macroeconomic concerns, the post‐Keynesian debate has reduced to a microeconomic debate over the role of financial intermediaries in the accommodation process. In the IS–LM model endogenous money flattens the LM. This misses its substantive significance which is the discrediting of monetarist money supply policy rules and monetarist critiques of central banking, its identification of the key role of credit, and its provision of a credit‐driven theory of the business cycle. |
