Vol. 20 No. 41 (2024)

Artículos

Endogeneity of money and monetary dependence in Mexico: theory and empirical relationships

Published 2024-12-02

  • Francisco A. Martínez Hernández
    • ,
  • Saúl Herrera Aguilar

Francisco A. Martínez Hernández
Universidad Autónoma Metropolitana. Departamento de Economía

Saúl Herrera Aguilar
Universidad Nacional Autónoma de México. Facultad de economía

Abstract

This article presents the development of the post-Keynesian theory of endogenous money, which assumes that central banks do not have complete control of monetary aggregates since the amount of money in the economy is determined endogenously by the demand for credit to finance productive and consumer activity. Furthermore, we analyze the deficiencies of the orthodox monetary approach and the economic-financial problems that come with trying to control credit and inflation with a single instrument, the short-term reference interest rate. Finally, through the application of causality tests in the Granger sense, we test the causal relationship between credit, monetary aggregates, inflation, compensation of employees, GDP, and the monetary base

Keywords

Post-Keynesian endougenous minero theory, Instability of money demand, Credit-inflation-monetary base relationship, High financial cost, Granger causality tests

PDF (Spanish)

References

  1. Asteriou, D., y S. Hall (2011). Applied Econometrics. Second Edition. Nueva York: Palgrave Macmillan.
  2. Banco de México (2014). “Semblanza histórica”. Link: https://www.banxico.org.mx/conociendo-banxico/semblanza-historica-historia-.html.
  3. Banco de México (2011). “Programa Monetario”. Link: https://www.banxico.org.mx/publicaciones-y-prensa/programas-de-politica-monetaria/%7BD20BFDED-441D-C1F9-4DBE-272BE23F3247%7D.pdf
  4. Blinder, A. S., (1999). “Central Banking in Theory and Practice” The MIT Press.
  5. Carrillo Fonseca, Luz Virginia (1998). “La Teoría de la Oferta Monetaria Endógena y su Aplicación al Caso de México (1978-1996)” Tesis de Maestría, UACPP CCH, UNAM.
  6. El Economista “Bancos ganaron 248, 023 millones de pesos a noviembre del 2023” jueves 11 de enero de 2024. Link: https://www.eleconomista.com.mx/sectorfinanciero/Bancos-ganaron-248023-millones-de-pesosa-noviembre-pasado-superaron-lo-obtenido-en-todo2022-20240111-0067.html.
  7. Galbraith (2023a). “The Quasi-Inflation of 2021-2022: A Case of Bad Analysis and Worse Response” Article. Institute for New Economic Thinking, february 2, 2023. Link: https://www.ineteconomics.org/perspectives/blog/the-quasi-inflation-of-2021-2022-a-case-of-bad-analysis-and-worse-response.
  8. Galbraith, J. K. (2023b). “Mainstream Economics’ Medieval Inflation Medicine” Project Syndicate, December 29, 2023. Link: https://www.project-syndicate.org/commentary/receding-inflation-exposes-deficits-in-economic-thinking-by-james-k-galbraith-2023-12?barrier=accesspay.
  9. Kaldor, N. (1985). “How Monetarism Failed” Challenge, vol. 28, No. 2. Taylor & Francis, Ltd.
  10. Kelton, S. (2024). “Stephanie Kelton: Inflation has come down in spite of the Fed, not because of it” Financial Times, january 10, 2024. Link: https://www.ft.com/content/5a7297a0-7ee9-4be0-882b-617d8d9b0cef.
  11. Lavoie, M. (2022). “Post-Keynesian Economics: New Foundations” Second Edition. Edward Elgar.
  12. Manjarres Caldiño, Missael (2017). “Endogeneidad del dinero en la economía China: evidencia empírica y tendencias de largo plazo” Tesis de Maestría, Facultad de Economía, UNAM.
  13. Martínez Hernández, Francisco A. y Contreras Cleofas, Omar (2023). “El Efecto Pass-Through en Argentina, Brasil y México, y su Efecto en Variables Reales y Financieras” en Ensayos selectos sobre macroeconomía de economías emergentes. Coordinador: Andrés Blancas. Editorial: Instituto de Investigaciones Económicas, UNAM.
  14. Martínez Hernández, Francisco A. (2015). “An Alternative Theory of Real Exchange Rate Determination: Theory and Empirical Evidence for the Mexican Economy, 1970-2011” Análisis Económico, vol. 30, No. 74.
  15. Moore, Basil J. (1988). “Horizontalists and Verticalists: The macroeconomics of credit money” Cambridge University Press, USA.
  16. Palley, T. (2008). “Endogenous Money: Implications for Money Supply Process, Interest Rate, and Macroeconomics”. Political Economic Research Institute, Working Paper Number 178. Link: https://scholarworks.umass.edu/peri_workingpapers/145/.
  17. Ramos, V. (2015). “El Banco Central, el mercado de dinero y la política monetaria”. Introducción a la Economía. Capítulo 6 tomado de internet el día 17 de Noviembre de 2023. Link: https://ocw.ehu.eus/mod/folder/view.php?id=35884
  18. Wray, R. (1990). “Money and Credit in Capitalist Economies: The Endogenous Money Approach”. Ed. Edward Elgar.

Most read articles by the same author(s)