1st Edition

Money and Payments in Theory and Practice

By Sergio Rossi Copyright 2007
    208 Pages 24 B/W Illustrations
    by Routledge

    168 Pages 24 B/W Illustrations
    by Routledge

    International in scope and written by a leading young Post-Keynesian economist, this book focuses on the working of money and payments in a multi-bank settlement system within which banks and non-bank financial institutions have been expanding their operations outside their countries of incorporation.

    Departing from conventionally held beliefs, Sergio Rossi sets off from a positive analysis of the logical origin of money, which is the essential principle of double-entry book-keeping through which banks record all debts and credits for further reference and settlement and provides theoretical and empirical advances in explaining money endogeneity for the investigation of contemporary domestic and international monetary issues.

    Showing that both money and banking have profound implications for real economic activities, this innovative work is essential reading, not only for scholars in monetary economics, but also for professionals concerned with monetary policy and payments system issues.




    List of figures

    List of tables



    List of abbreviations


    1 Money and credit

    The essence of money

    The commodity theory of money: a critical appraisal

    The chartalist theory of money: an analytical assessment

    The mechanisms of credit

    Banks and credit

    Credit and production

    Money and credit supply

    Endogenous money and credit

    2 Banks and payments

    The monetary macroeconomics of banking

    The dual function of banks

    The meaning and purchasing power of bank deposits

    The monetary macroeconomics of payments

    Payments on the labour market

    Payments on the financial market

    Payments on the market for produced goods and services

    3 The central bank and the state

    The monetary macroeconomics of interbank payments

    The characteristics and workings of the national payment system

    The dual function of a central bank in domestic payment systems

    The monetary macroeconomics of state payments

    Some conceptual shortcomings in the state theory of money

    The dual function of a central bank in state payments

    4 International settlement systems

    The current architecture for international payments

    The lack of an international settlement institution

    The lack of international money emissions

    Reforming the international monetary architecture

    The working of an international settlement institution

    The working of international money emissions

    5 Monetary policy strategies

    Inflation theory and inflation targeting: a critical appraisal

    Some conceptual and analytical shortcomings

    Inflation in an endogenous money system

    A structural target for monetary policy: payment systems’ reform

    The required structural change in domestic payment systems

    The operationalization of payment systems’ reform


    Author index

    Subject index


    Sergio Rossi