The Endogeneity of Money

It was uncharacteristic of Nicholas Kaldor to take an ambiguous stand on any issue, but in the above it is not clear where he stood on the question of the endogeneity or the exogeneity of money, or whether he believed it to be of importance. In his later writings on money he viewed the attempt to control the path of nominal aggregate demand by controlling the path of an arbitrarily defined money supply — the fundamental policy posture of monetarism — as a ‘scourge’. 2 If monetarism was a ‘scourge’ then the authorities by operating on interest rates could determine the supply of money (money supply is exogenous), but the overall impact of such policies was so adverse that it was not wise to do so. Once the price of monetarism became evident the authorities would have to accomodate the markets (money supply is endogenous). These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.