An Analysis of Marxist Theory of Endogenous Money

In the history of studies on economics the controversies over the issue of money have been given rise to by the traditional dichotomy method which long emphasized real economy in economics.The mainstream economics can only consider money as cash in the theory of Walrus's general equilibrium because of the hypothesis of exogenous money supply.This has resulted in the consequent logical criticism in the Cambridge Capital Controversies in the 1950s and 1960s.Publication of the work The General Theory of Employment Interest and Money signals Keynes' intention to refute the dichotomy analysis method and break off from the neo-classical analysis method of real objects.However,because of the lack of a theoretical foundation in value and distribution theories,he was unable to establish a productive theory of monetary economy.By contrast,based on the labor theory of value Marxian economics has generated the theory of endogenous money that took the relations of capitalist economy or market economy as the foundation of analysis by integrating the theories of value and money.