HORIZONTALISM, STRUCTURALISM, LIQUIDITY PREFERENCE AND THE PRINCIPLE OF INCREASING RISK

It is shown that the horizontal post‐Keynesian view of credit‐money endogeneity is reasonable rather than extreme. One can argue in favour of a horizontal credit‐money supply curve while still taking into account the non‐accommodating behaviour of the central bank, financial innovations, protfolio adjustments, liquidity perference theory, and the principle of increasing risk. The differences between horizontalists and other post‐Keynesian monetary theorists are matters of emphasis rather than substantial differences of opinion. The only real topic of contention is the ultimate determinant of the base rate of interest.