Blog-Reference
David Graeber makes the crucial point that money and credit are two sides of the same coin. What follows from this? In rough terms, it follows that the Quantity Theory, which is complementary to General Equilibrium theory, is wrong. And from this, it turn follows that Heterodoxy should come up as soon as possible with a new Theory of Money.
That the Bank of England shares Graeber's insight is a good sign. On the other hand, does this eliminate the need for a better Theory of Money, nay, for an new Paradigm, that is, for rethinking economics from the ground up? Certainly not.
Time for everybody to switch to the constructive mode (for a start see 2011).
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2011). Reconstructing the Quantity Theory (I). SSRN Working Paper Series, 1895268: 1–26. URL
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