Year: 2024
Type: article
Abstract: Purpose In terms of understanding the new issues emerging in the practice of monetary policies and how to evaluate the latest theories of monetary policy, this paper proposes referring to Das Kapital and developing a monetary policy theory grounded in Marxist political economy. Design/methodology/approach Based on the discussion of interest-bearing capital in Das Kapital and using a heterogeneous agent model, this paper tries to explain the determining mechanism of interest rate, leverage ratio, and asset price. Findings The research finds that if there are differences in the techniques possessed by capital, the resulting disparities in production efficiency will lead to differences in profit rates and further influence the functional choices of capital in the movement of social total capital. Thus, with the formation of lending relationships, interest rates, leverage ratios, and asset prices will be endogenously determined simultaneously. Moreover, as the degree of technological diffusion influences the industrial capitalists’ willingness to take loans as well as the level of profit rates, there may be counter-cyclical changes in the returns on productive investment and financial investment at different stages of the technology life cycle, contributing to diverting funds out of the real economy. Besides, this paper discusses the challenges, tools, and goals of monetary policy within the credit money system. Originality/value Clarify the intrinsic mechanism of the functional differentiation of capital determined by heterogeneous technologies and exogenous capital-labor relation and analyze the impact of capital differentiation on the economy.
Source: China Political Economy
Author: Xiaonan Qiao
Institution: Nankai University
Language: English
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: diamond
Awards: G2934771229, G7308932268
OpenAlex ID: W4404533273