2022 (19), №2

Alternative Institutional Strategies for Constructing Monetary Theories

For citation: 

Biryukov, V. V. (2022). Alternative Institutional Strategies for Constructing Monetary Theories. AlterEconomics, 19(2), 262-282.  https://doi.org/10.31063/AlterEconomics/2022.19-2.4


The article discusses the new strategies for studying macro-economic processes and relationships between the monetary and real variables in light of the transformations of the modern economy. The research aims to describe the strategies of constructing monetary theories of mainstream economics and to develop an approach for studying endogenous institutional relationships in monetary processes. Conceptually, the study uses as a point of departure the idea that economic entities pursue value-based and economic motives. Such an approach reflects the intersubjective nature of the economy and helps overcome the extremes of methodological individualism and methodological holism. The study shows how the institutional characteristics of the strategies in question are determined by orthodox and heterodox versions of Keynesian economics. The paradigmal limitations of the given strategies may stem from the fact that methodologically they rely on individualism, which leads to exogenous interpretations of institutions and monetary phenomena. Therefore, it is impossible to explain the emergence of market prices as an institutional phenomena by drawing on the neo-classical versions of the theory of value. Macro-economic indicators in mainstream economics are exogenous aggregated variables. The study traces the development of the paradigmal framework of classical political economy and Marx’s institutional-evolutional theory of value and money, which were determined by the normative interpretation of the economic behaviour of economic entities. Following the above, it is shown that the proposed approach corresponds to the classical tradition and contributes to the research on the endogenous relationship between the nominal and actual parameters of macro-economic processes. This approach also demonstrates the need to consider money as an institutional variable characterizing work output and the corresponding part of GDP. The conclusion is made that in order to address the systemic problems of national economic development, it is particularly important to create an institutional model that would be adequate to the current reality and that would be suitable for constructing effective fiscal and monetary regulators of monetary processes.

Vitaly V. BIRYUKOV, Dr. Sci. (Econ.), Professor, Omsk Humanitarian Academy, 2A, 4th Cheluskintsev St., Omsk, 644105, Russian Federation, e-mail: sciencebvv@gmail.com,  https//orcid.org/0000-0002-3385-3603

Alvesson, M. & Spicer, A. (2019). Neo-institutional theory and organization studies: A mid-life crisis?  Organization Studies, 40(2),  199–218. https://doi.org/10.1177/0170840618772610.

Anan’yin, O. I. (2013). Ekonomicheskie ontologii i ekonomicheskie instituty [Economic ontologies and economic institutions].  Federalizm [Federalism], 1,  75- 100. (In Russ.)

Aristotle (1983).  Sochineniya v chetyrekh tomakh [The works in four volumes]. Vol. 4.  Moscow, Russia: Mysl’, 830. (In Russ.)

Arrow, K. J. (1995). K teorii cenovogo prisposobleniya [Toward a theory of price adjustment].  Vehi ekonomicheskoy mysli. Teoriya firmy [Milestones of economic thought. Theory of the firm].  In V. M. Gal’perin (Eds.). Vol. 2. St. Petersburg, Russia: Ekonomicheskaya shkola, 534. (In Russ.)

Baumol, W. (2001). Chego ne znal Alfred Marshall: vklad XX stoletiya v ekonomicheskuyu teoriyu [What Marshall Didn’t Know: On the Twentieth Century’s Contributions to Economics].  Voprosy ekonomiki, 2,  73–107. (In Russ.)

Biryukov, V. (2020). Cennosti, instituty i ekonomicheskoe razvitie [Values, institutions and economic development].  Obshhestvo i ekonomika [Society and Economics], 4,  5–24. DOI: 10.31857/S020736760009149–2. (In Russ.)

Bjerg, O. (2018).  Kak delayutsya den’gi? Filosofiya postkreditnogo kapitalizma [Making Money: The Philosophy of Crisis Capitalism].  Moscow, Russia: Ad Marginem Press, 312. (In Russ.)

Blaug, M. (1994).  Ekonomicheskaya mysl’ v retrospective [Economic theory in Retrospect].  Moscow, Russia: Delo LTD, 687. (In Russ.)

Burlachkov, V. (2009). Vosproizvodstvo i monetarnaya sfera (o stat’e A. Navoya «O roli i meste emissii tsentral’nogo banka v vosproizvodstvennykh protsessakh») [Reproduction and monetary sphere (On the Paper by A. Navoi «On the Role and Place of the Central Bank Money Emission…»)].  Voprosy ekonomiki, 5,  129–135. DOI: https://doi.org/10.32609/0042–8736–2009–5-129–135. (In Russ.)

Coccia, M. (2018). An introduction to the theories of Institutional change.  Journal of Economics Library, 5(4),  337–344. DOI:10.1453/jel.v5i4.1788.

Connors, L. & Mitchell, W. (2017). Framing Modern Monetary Theory.  Journal of Post Keynesian Economics, 40(2),  239–259. DOI: https://doi.org/10.1080/01603477.2016.1262746.

Crespo, R. (2021). On money as a conventional sign: revisiting Aristotle’s conception of money.  Jour-nal of Institutional Economics, 17(3),  459–471. DOI: https://doi.org/10.1017/S1744137420000570.

Davidson, P. (2006). Postkeynsianskaya shkola v makroekonomicheskoy teorii [The Post Keynesian School in macroeconomic theory].  Voprosy ekonomiki, 8,  82–101. DOI: https://doi.org/10.32609/0042–8736–2006–8-82–101. (In Russ.)

Davis, A. E. (2017).  Money as a Social Institution. The Institutional Development of Capitalism.  London: Routledge, 208. DOI: https://doi.org/10.4324/9781315671154.

Dubyansky, A. N. (2015). Gosudarstvennaya teoriya deneg G. Knappa: istoriya i sovremennye perspektivy [G. Knapp’s state theory of money: history and current perspectives].  Voprosy ekonomiki, 3,  109–125. DOI: https://doi.org/10.32609/0042–8736–2015–3-109–125. (In Russ.)

Dyatel, E. P. (2021). Status ekonomicheskoy teorii kak nauchnoy i uchebnoy discipliny [The status of economic theory as a scientific and educational discipline].  Zhurnal ekonomicheskoj teorii [Russian Journal of Economic Theory], 18(3),  374–388. DOI: https://doi.org/10.31063/2073–6517/2021.18–3.4. (In Russ.)

Elder-Vass, D. (2019). No price without value: towards a theory of value and price.  Cambridge Journal of Economics, 43(6),  1485–1498. DOI: https://doi.org/10.1093/cje/bez040.

Fagiolo, G. & Roventini, A. (2009). O nauchnom statuse ekonomicheskoy politike: povest’ ob al’ternativnykh paradigmakh [On the Scientific Status of Economic Policy: A Tale of Alternative Paradigms].  Voprosy ekonomiki, 6,  24–47. DOI: https://doi.org/10.32609/0042–8736–2009–6-24–47. (In Russ.)

Felin, T. & Foss, N. (2019). Microfoundations for institutional theory?  Microfoundations of Institutions (Research in the Sociology of Organizations). Vol. 65B.  In Haack P., Sieweke J. & Wessel L. (Eds.). Bingley: Emerald Publishing Limited, 393–408. DOI: https://doi.org/10.1108/S0733–558X2019000065B031.

Frolov, D. P. (2020). Postinstitucionalizm: za predelami institucional’nogo meynstrima [Post-institutionalism: Beyond the Institutional Mainstream].  Voprosy ekonomiki, 5,  107–140. DOI: https://doi.org/10.32609/0042–8736–2020–5-107–140. (In Russ.)

Galí, J. (2018). The State of New Keynesian Economics: A Partial Assessment.  Journal of Economic Perspectives, 32(3),  87–112. DOI: 10.1257/jep.32.3.87.

Goryunov, E. L., Drobyshevsky, S. M., Mau, V. A. & Trunin, P. V. (2021). Cho my (ne) znaem ob effektivnosti instrumentov DKP v sovremennom mire [What do we (not) know about the effectiveness of the monetary policy tools in the modern world?].  Voprosy ekonomiki, 2,  5–34. DOI: https://doi.org/10.32609/0042–8736–2021–2-5–34. (In Russ.)

Hands, W. (2012). Normativnaya teoriya racional’nogo vybora: proshloe, nastoyashhee, budushhee [Normative rational choice theory: past, present, future].  Voprosy ekonomiki, 10,  52–75. DOI: https://doi.org/10.32609/0042–8736–2012–10–52–75. (In Russ.)

Harmon, D., Haack, P. & Roulet, T. (2019). Microfoundations of institutions: A matter of structure vs. agency or level of analysis?  Academy of Management Review, 44(2),  464–467. DOI: https://doi.org/10.5465/amr.2018.0080.

Hein, E. (2017). Post-Keynesian macroeconomics since the mid 1990s: Main developments.  European Journal of Economics and Economic Policies: Intervention, 14(2),  131–172. DOI: https://doi.org/10.4337/ejeep.2017.02.01.

Hodgson, G. M. (2014). On fuzzy frontiers and fragmented foundations: Some reflections on the original and new institutional economics.  Journal of Institutional Economics, 10(4),  591–611. DOI: https://doi.org/10.1017/S1744137414000307.

Huber, J. (2017).  Sovereign Money. Beyond Reserve Banking.  London: Palgrave Macmillan Cham, 206. DOI: https://doi.org/10.1007/978–3-319–42174–2.

Jakab, Z. & Kumhof, M. (2015). Banks are not intermediaries of loanable funds — and why this matters.  Bank of England Working Paper,  529. DOI: http://dx.doi.org/10.2139/ssrn.2612050.

Kam, E., Smithin, J. & Tabassum, A. (2019). The Long-Run Non-Neutrality of Monetary Policy: A General Statement in Dynamic General Equilibrium Model.  Review of Political Economy, 31(2),  178–193. DOI: https://doi.org/10.1080/09538259.2019.1642551.

Keynes, J. M. (1993). Obshhaya teoriya zanyatosti, procenta i deneg [The general theory of employment, interest and money]. In A. I. Stolyarov (Eds.).  Antologiya ekonomicheskoy klassiki [Anthology of economic classics].  Vol. 2. Moscow, Russia: Ekonov, 485. (In Russ.)

Kirdina-Chandler, S. G. (2019). O dengakh i socialnykh poryadkakh (razmyshleniya nad statiyoi V. M. Efimova) [About money and social orders (reflections on the article of V. M. Efimov)].  Voprosy teoreticheskoy ekonomiki [Theoretical Economics], 2,  32–42. DOI: 10.24411/2587-7666-2019-10203. (In Russ.)

Kolodko, G. W. (2020). Posledstviya. Ekonomika i politika v postpandemicheskom mire [After. Economics and politics of the post-pandemic world].  Voprosy Ekonomiki, 5,  25–44. DOI: https://doi.org/10.32609/0042–8736–2020–5-25–44. (In Russ.)

Lawson, T. (2018). The Constitution and Nature of Money.  Cambridge Journal of Economics, 42(3),  851–873. DOI: https://doi.org/10.1093/cje/bey005.

Lo, A. Y. & Spash, C. L. (2013). Deliberative monetary valuation: in search of a democratic and value plural approach to environmental policy.  Journal of Economic Surveys, 27(4),  768–789. DOI: https://doi.org/10.1111/j.1467-6419.2011.00718.x.

Maevsky, V. (2010). Krugooborot osnovnogo kapitala i ekonomicheskaya teoriya [Reproduction of fixed capital and economic theory].  Voprosy ekonomiki, 3,  65–85. DOI: https://doi.org/10.32609/0042-8736-2010-3-65-85. (In Russ.)

Maevsky, V. I. & Rubinstein, A. A. (2021). Koncepciya makroekonomicheskoy politiki kompromissa mezhdu inflyaciey i rostom [The concept of Macro-economic policy based on the compromise between inflation and growth].  Zhurnal ekonomicheskoj teorii [Russian Journal of Economic Theory], 18(4),  485–496. DOI: https://doi.org/10.31063/2073-6517/2021.18-4.1. (In Russ.)

Maevsky, V. I. (2021). O bazovykh predposylkakh ne-nejtral’nosti deneg v ekonomicheskoy teorii [On the Basic Preconditions of Non-Neutrality of Money in Economic Theory].  Zhurnal institutsional’nykh issledovaniy [Journal of Institutional Studies], 13(1),  6–19. DOI: 10.17835/2076-6297.2021.13.1.006-019. (In Russ.)

Marshall, A. (1993).  Principy politicheskoy ekonomii [Principles of political economy].  In 3 Volumes. Vol. 3. Moscow, Russia: Progress, 352. (In Russ.)

Marx, K. (1985).  Capital [Capital].  Volume 3. Part. 1. Moscow, Russia: Politizdat, 508. (In Russ.)

Marx, K. (1986).  Capital [Capital].  Volume 3. Part. 2. Moscow, Russia: Politizdat, 1080. (In Russ.)

Marx, K. (1988).  Capital [Capital].  Volume 1. Moscow, Russia: Politizdat, 891. (In Russ.)

Milonakis, D. & Fine, B. (2009).  From Political Economy to Economics: Method, the Social and the Historical in the Evolution of Economic Theory.  London; New York: Routledge, 374.

Mitchell, W., Wray, L. R. & Watts W. (2019).  Macroeconomics.  London, UK: Macmillan; Red Globe Press, 604.

Moiseev, S. R. (2018). “Renessans” monetarizma: chem zhila znamenitaya teoriya v 2000–18 godakh [Monetarism’s “renaissance”: How the well-known theorylived in 2000–2018.].  Voprosy ekonomiki, 1,  26–44. DOI: https://doi.org/10.32609/0042–8736–2018–1-26–44. (In Russ.)

Moiseev, S. R. (2019). Hayp vokrug (ne)denezhnoy (ne)teorii [Hype around (non)monetary (non)theory].  Voprosy Ekonomiki, 9,  112–122. DOI: https://doi.org/10.32609/0042–8736–2019–9-112–122. (In Russ.)

Murray, P. (2018).  The Mismeasure of Wealth. Essays on Marx and Social Form.  Chicago: Haymarket Books, 568.

Nekipelov, A. D. (2019). Krizis v ekonomicheskoy nauke — priroda i puti preodoleniya [The Crisis in Economics — nature and ways to overcome it].  Vestnik Rossiyskoy Akademii nauk [Herald of the Russian Academy of Sciences], 89(1),  24 -37. DOI: https://doi.org/10.31857/S0869–587389124–37. (In Russ.)

Pears, I. (1981). Teoriya sprosa, renty i suvereniteta potrebitelya [Demand theory, consumer’s surplus, and sovereignty]. In V. S. Afanasyev, R. M. Entov (Eds.).  Sovremennaya ekonomicheskaya mysl’ [Modern economic thought].  Moscow, Russia: Progress, 815. (In Russ.)

Polterovich, V. M. (2011). Stanovlenie obshhego sotcialynogo analiza [Formation of the general social analysis].  Obshhestvennye nauki i sovremennost’ [Social sciences and contemporary world], 2,  101–111. (In Russ.)

Reder, M. W. (1947).  Studies in the Theory of Welfare Economics.  New York: Columbia University Press, 208.

Schumpeter, J. (2001).  Istoriya ekonomicheskogo analiza [History of economic analysis].  Translated from English. In V. S. Avtonomova (Eds.). In 3 volumes. Vol. 3. St. Petersburg, Russia: Economic school, 688. (In Russ.)

Scitovsky, T. (1952).  Welfare and Competition.  London: Allen & Unwin Ltd, 457.

Stigler, G. (1950). The development of utility theory. I.  Journal of Political Economy, 58(4),  307- 327. DOI: https://doi.org/10.1086/256962.

Stiglitz, J. E. (2019).  People, power, and profits: Progressive capitalism for an age of discontent.  New York; London: W. W. Norton & Company, 366.

Suharev, O. S. (2021). Institucionalizm: rascvet ili upadok? [Institutionalism: on the rise or declining?].  Obshhestvo i ekonomika [Society and economy], 11,  18–43. DOI: https://doi.org/10.31857/S023620070017484–9. (In Russ.)

van Staveren, I. (2009). Etika effektivnosti [Ethics of efficiency].  Voprosy ekonomiki, 12,  58–71 DOI: https://doi.org/10.32609/0042–8736–2009–12–58–71. (In Russ.)

Viner, J. (2000). Koncepciya poleznosti v teorii cennosti i ee kritiki [The utility concept in value theory and its critics]. In V. M. Gal’perin (Eds.).  Vehi ekonomicheskoy mysli. Teoriya potrebitel’skogo povedeniya i sprosa [Milestones of economic thought. Theory of consumer behavior and demand].  Vol. 1. St. Petersburg, Russia: Economic school, 380. (In Russ.)

von Mises, L. (2012).  Teoriya deneg i kredita [The theory of money and credit].  Chelyabinsk, Russia: Socium, 808. (In Russ.)

Whaley, L. (2018). The critical institutional analysis and development (CIAD) framework.  International Journal of the Commons, 12(2),  137–161. DOI: http://doi.org/10.18352/ijc.848.

Yefimov, V. M. (2018). O dvukh tipakh sotcialynogo poryadka. Ch. I [On two types of social orders. Part I].  Voprosy teoreticheskoy ekonomiki [Theoretical Economics], 1,  7–25. (In Russ.)