The macroeconomics of endogenous money: response to Fiebiger, Palley and Lavoie

Marc Lavoie is correct that I was addressing too many audiences in my paper (Keen 2014)post-Keynesian macroeconomists, neoclassical macroeconomists, and the general publicand that this confused the exposition.In my reply I will restrict myself just to the first audiencepost-Keynesian macroeconomists who accept that the money supply is endogenousthough I will also contrast this audience's position with neoclassical arguments.In Section 2 I clarify and correct my core proposition by deriving, from simple expenditure matrices, thatgiven the endogeneity of moneyaggregate demand and aggregate income necessarily include the change in debt.In Section 3 I address specific criticisms of other aspects of my paper, including my interpretation of precedents in the literature.