Sergio Cesaratto
DEPS, Università di Siena
Abstract
Supporters of the Monetary Circuit Theory argue that workers’ or households’ savings may be used to fix firms’ losses and avoid crises. The question is reminiscent of a discussion that took place between Dennis Robertson (DHR) and Keynes on the Treatise (1930) about Keynes’s idea that workers’ savings might cover firms’ losses. In this discussion, DHR denied that savings could correspond to firms’ losses, arguing that savings do not exist independently of investment. Circuitists like Graziani seem to reiterate the Treatise’s mistake of maintaining that part of savings corresponds to firm’s losses and are lent to firms to fix those losses, while neglecting the effects of those losses on output as DHR pointed out in the early 1930s.
Keywords
Monetary circuit, Robertson, Keynes, Graziani, Treatise.
Jel Codes
B22, B50, E12
