The Classical Theory of Interest - A Critical Note

Jan Toporowski

STOREP CONFERENCES, STOREP 2016 - Engines of growth and paths of development in the minds of analysts, policy makers and human beings

Jan Toporowski

Last modified: 2016-06-14

Abstract

The paper examines the classic theory of interest derived from the work of David Rcardo, as that theory appears in the recent book by Anwar Shaikh. The paper shows that the theory only applies where the production of money is external to the system. An internal credit system results in a theory of interest and debt that merely redistributes is income.

Keywords

Interest; Banking; Capitalism

Full Text: Paper Toporowski