A Unified Theory of Monetary Dynamics


  • José Villacis University San Pablo, Spain




Circulation of money, income multiplier, bank money multiplier.


In the end, the only and eternal vocation of money is circulation. This circulation causes the contrary effect to income expansion, studied by the income velocity of circulation of money, by the income multiplier and by the bank money multiplier. These three issues are thought to belong to the same operation. Therefore, a unified money theory can be established.A dynamic economy finances investments with the savings existing in the system but, the economy is simultaneously growing in real and nominal terms. Such growth in circulating capital is only possible through the creation of money in the economic system. In general terms, the system tends to finance growth with the spontaneous creation of money.


A Competitive Theory of Fluctuations and the Feseability and Desirability of Stabilization Policy, en Rational Expectations, Adjusment,and the Dynamic Respnse of Income to Policy Changes (1973), Journal of Money,Credit and Banking,4 (February),157-172.

An Equilibrium Model of the Business Cycle (1975), Journal of Policitical Economy, 83:113-44.

A Teatrise on Money (1930) (London and New York:Mc Millan).

A Tract on Monetary Reform (1923) (London Mc:Millan).

Abel, Andrew B. 198: Empirical Invesment Equations:An Integrativa Framework, in On the State of Macroeconomics.Número 12.Amsterdam:North Holland.

Are Market Forecast Rational? (1981), American Economic Review,71:293-306.

Azariadis,C. 1975 : A Reexamination of Natural Rate Theory , American Economic Review, 71: 946-60.

Barro, Robert J. 1977 : Unanticipated Money Growth and Unemployment in the United States, American Economic Review, 67: 101-15.

Barro, Robert. 1980: A Capital Market in an Equilibrium with Restricted Borrowing. Econometrica, 48: 1393-417. http://dx.doi.org/10.2307/1912814

Barro,Robert 1980: Federal Deficit Policy and the Effects of Public Debt Shocks, Journal of Money, Credit and Banking, 12; 747-62.

Bernácer Germán : 1916. Sociedad y Felicidad. Edit.Beltrán. Madrid (Books)

Bernácer Germán: 1922. La Teoría de las Disponibilidades. Madrid.Barcelona.(Article).

Bernácer Germán:1925 El Interés del Capital. Edit.Lucentum.Alicante.(Books).

Bernácer Germán: 1945.La Doctrina Funcional del Dinero. Edit.Consejo Superior de Investigaciones Científicas.Madrid (Books)

Brunner, K. and Meltzer. A., Carnegie-Rochester Conference Series in Public Policy.Amsterdam:North Holland.

Blinder, Alan 1979 Economic Policy And the Great Stagflation, New York Academic Press.

Blinder,Alan S.,y Fisher. 1981:Inventories, Rational Expectations, and the Business Cycle, Journal of Monetary Economics, 8: 277-304. http://dx.doi.org/10.1016/0304-3932(81)90012-X

Baumol William 1952. The Transaction Demand for Cash:An Inventory Theoritic Approach. Quaterly Journal of Economics,66 November.

Baumol William, James Tobin, 1956. The Interest Elasticity of Transactions Demand for Cash. Review of Economic and Statistics,August.

Cagan, Phillips, 1956 The Monetary Dinamics of Hiperinflation, en Studies in the Quantity Theory of Money, editado por Milton Friedman.Chicago:University of Chicago Press.

Econometric Policy evaluation: A Critique(1976), in The Phillips Curve and Labor Markets, edited by Karl Brunner y Allan Meltzer.Amsterdam:North Holland.

Expectation and Economic Policy, (1980) editado por Stanley Fisher. Chicago:Chicago:National Bureau of Economic Research.

Feldstein Martin, 1980: Comments on A Competitive Theory of Fluctuations and the Feastibility and Desirability of stabilization Policy, En Rational Expectations of the Gramlih Study, Brooking Papers on Economic Activity,1: 167-168.

Feige,E. 1964: The Demand for Liquid Assets:A Temporal Cross-Section Analysis (Englewood Cliffs,N.J.:Prentice-Hall)

Fisher,I. 1911: Purchasing Power of Money (New York:Mc Millan)

Friedman M. 1956:The Quantity Theory of Money;A Restatement, en M.Friedman (Edi.) Studies in the Quantity Theory of Money (Chicago:University of Chicago Press).

Friedman M. 1957: A Theory of the Consumption Function (Princeton,N.J.:Princeton Univeristy Press for the NBER).

Friedman M. Interest. 1966: Rates and the Demand for Money, Journal of Law and Economics, 9.

Friedman M. 1968: The Role of Monetary Policy,American Economic Review, 58:1-17.

Grossman,S., y Joseph E.Stiglitz.1981: Information and Competitive Stock Prices,American Economic Review,66 246-53.

Hall, Robert E.1976: The Phillips Curvew and Macroeconomic Policy., in the Phillips Curves and Labor Markets,editado por Karl Brunner y allan H.Meltzer. Carnegie-Rochester Conference Series on Public Policy number 1.Amsterdam:North Holland.

Hayek,F.A. 1945: The Use of Knowledge in Society, American Economic Review, 35: 519-30.

Hicks, J.R. 1935: A Suggestion for Symplifying the Theory of Money. Economica, 2 (February).

Kearl, James.1979: Inflation, Mortgagges,Houssing, Journal of Political Economy, 87: 1115-38. http://dx.doi.org/10.1086/260815

Keynes,J.M. 1936 : The General Theory of Employment, Interest and Money. New York:Harcourt,Grace and World.

Klein,B. 1974: The Competitive Supply of Money ,Journal of Money,Credit and Banking, 6(November), 423-454. http://dx.doi.org/10.2307/1991457

Kuhn, Thomas S.1970: The Structure of Scientific Revolutions., 2nd Edition.Chicago:University of Chicago Press.

Kydland,Finn E., y Edward C.Prescott.1977: Rules Rather than Discretion: The Inconsistency of Optimal Plans, Journal of Political Economy, 85: 473-91. http://dx.doi.org/10.1086/260580

La Oferta Agregada como Función de la Demanda Agregada Permanente (1992), In Revista de Derecho Financiero y de Hacienda Pública. Volumen XLII-Número 219 (May-June).Madrid.

La Política Fiscal No Existe (1990), In Revista de Derecho Financiero y Hacienda Pública. Volumen XL-Number 205 (January-February).Madrid.

Laidler, D.1966,: Some Evidence of the Demand for Money, Journal of Political Economy,74 (February),55-68. http://dx.doi.org/10.1086/259109

Lintner, John.1965: The Valuation of Risk Assets and the Selection of Risky Invesment in Stocks Portfolios and Capital Budgets, Review of Economic and Statistic, 47:13-37. http://dx.doi.org/10.2307/1924119

Lucas, Robert E. Pr. 1972: Expectations and the Neutrality of Money, Journal of Economic Theory, 4:103-24. http://dx.doi.org/10.1016/0022-0531(72)90142-1

Lucas,R.E. Jr. y T..J..Sargent.1978:After Keynesian Macroeconomics, in After the Phillips Curve:Persistence of High Inflation and High Unemployment. Federal Reserve Bank of Boston Conference, vol. 19,Boston:Federal Reserve Bank, pp.49-72.

McCallum,Bennet T. 1976: Rational Expectations and the Natural Rate Hypothesis: Some Consistent Estimates, Econometrica, 44:43-52. http://dx.doi.org/10.2307/1911379

Matthews,R.C.O.1963: Expenditure Plans and the Uncertainty Motive for Holding Money, Journal of Policital Economy,71(June),201-218. http://dx.doi.org/10.1086/258767

Mayer, Thomas.1978: The Structure of Monetarism. New York:Norton.

Meltzer,Allan.1978: Monetarism,Keynesian and Quantity Theories, in The Structure on Monetarism,editado por Thomas Mayer.New York:Norton.

Methods and Problem in Business Cycles Theory (1980), Journal of Money,Credit and Banking, 12: 696-715. http://dx.doi.org/10.2307/1992030

Meyer,P.A. y Neri,J.A.1975: A Keynes-Friedman Money Demand Function,American Economic Review,65(September),610-623.

Mishkin,Frederik S. 1978: Efficient- Market Theory:Implications for Monetary Policy, in Brookings Paper on Economy Activity,editado for Okun y G.L.Perry.Vol.3,pp 707-68

Modigliani, F.Brumberg,R.E. 1954: Utility analysis and the Consumption Funtion:An Interpretation of Cross-Section Data, en K.K.Kurihara, Pos-Keynesian Economics,Londres,George Allen&Unwin.

Monetary Policy and Long Term Interest Rates: And Efficient Market Approach (1981), Journal of Monetary Economics, 7:29-55. http://dx.doi.org/10.1016/0304-3932(81)90050-7

Musgrave,R..A. 1939.: The Voluntary Exchange Theory of Public Economy, en Quaterly Journal Economy.

Muth, John F. 1960: Optimal Properties of Exponencially Weithted Forescast, Journal of the American Statistical Association,55: 299-306. http://dx.doi.org/10.1080/01621459.1960.10482064

Nelson,C.R. y G.W.Schwartz.1977: On Testing Hypothesis That the Real Rate of Interest Is Constant, American Economic Review,67: 478-86.

Okun, A. M. 1981: Prices and Quantities. Washington D.C.:The Brooking Institution.

Phelps, Edmund S. 1970: The New Microeconomics in Employment and Inflation Theory,edition by Phelps.New York: Norton

Phillips,A.W. 1958: The Relation Between Unemployment and the Rate Of Change of Money Wage Rates in the United Kindgdom, 1861-1957, Economica,25: 283-94. http://dx.doi.org/10.2307/2550759

Prescott, Edward C. 1977: Should Control Theory Be Used for Economics Stabilization? , in Optimal Policies,Control Theory and Technology Exports, editado por Karl Brunner y Allan Meltzer. Carnegie-Rochester Conference Series on Public Policy.Amsterdam: North Holland. http://dx.doi.org/10.1016/0167-2231(77)90022-7

Radner, Roy 1979: Rational Expectations Equilibrium: Generic Existence and the Information Revealed by Price, Econometrica, 47:655-78.

Rational Expectations an the Theory of Price Movements (1961), Econometrica, 29:315-35.

Rational Expectations and Macoeconomics Stabilization Policy (1980), Journal of Money,Credit and Banking,12: 716-46. http://dx.doi.org/10.2307/1992031

Rules, discretion and the Roles of the Economic Advisor, in Rational Expectation and Economic Policy (1980), editado por Stanley Fisher.Chicago:National Bureau of Economic research.

Sargent,Thomas J.1976: The Observational Equivalence of Natural and Unnatural Rate Theories of Macroeconomics, Journal of Political Economy, 84: 631-40. http://dx.doi.org/10.1086/260465

Sargent, Thomas and Neil Wallace.1975: Rational Expectations, the Optimal Monetary Instrument and the Optimal Money Supply Rule, Journal of Polical Economy,83:241-54. http://dx.doi.org/10.1086/260321

Sheffrin,Steven M.1979:Uninticipated Money Growth and Duput Fluctuations, Economic Inquiry,17: 1-13.-1983. Rational Expectations. Cambridge University Press, Cambridge,England.

Some International Evidence on Ouput-Inflation Trade-offs (1973), American Economic Review,: 326-34.

The Monetarist Counter-Revolution Today-An Appraisal (1981), Economic Journal,91: 29-42. http://dx.doi.org/10.2307/2231692

The Permanent Income Concept in a Macroeconomic Model (1968) Oxford Economic Paper, 20 March,11-23.

The Theory of Public Finance (1959), Londres,McGraw-Hill.

Tobin, James, 1966: Money and Economic Growth, Economterica, 33:671-84. http://dx.doi.org/10.2307/1910352

Undesttanding Business Cycles (1973), in Stabilization of the Domestic and International Economy,editado por

Unemployment Policy (1973), American. Economy Review, 68: 353-7

Villacís, José. 1987: Política Monetaria y Fiscal: Una Paradoja de los Subrogados del Dinero. In Revista de Derecho Financiero y de Hacienda Pública. Volumen XXXVII, number 191 (September-October).Madrid.