Keynes: endogeneity of money and bank development

Abstract

This analysis addresses is about the endogeneity of money that is maintained in J. M. Keynes' approaches, which are not entirely consistent in his different works, although there is a line of continuity in which investment has a different role than saving. The decisive role of the banking system in the economic dynamics is analyzed due to its ability to grant credit and how the central bank plays an important role, limiting bank leverage and establishing limits on the creation of money through credit. This review resumes Keynes's essential approaches to support a fundamental component of the post-Keynesian economy: the theory of the endogeneity of money, the theory that explains the banking crisis.