The Emergence of Profit and Interest in the Monetary Circuit

Abstract

Efficient progress of the monetary theory of production (MTP) is hampered by an unsatisfactory account of how profit and interest emerge in the monetary circuit. As matter of fact, this question puzzled already the classics. It seems evident that it cannot be answered by applying the usual tools. The present paper’s purpose is to overcome the deadlock. This is done by setting the circulation approach on general structural axiomatic foundations.

Keywords: new framework of concepts, structure-centric, axiom set, monetary circuit, quantity of money, transaction money, profit, distributed profit, rate of interest, profit ratio equalization

JEL Classification: B41, B59, E19, E40