Monetary policy in the post Keynesian theoretical framework

Vol. 37 No. 1 (2017)

Jan-Mar / 2017
Published February 26, 2020

How to Cite

Arestis, Philip, and Fábio Henrique Bittes Terra. 2017. “Monetary Policy in the Post Keynesian Theoretical Framework”. Brazilian Journal of Political Economy 37 (1):45-64.

Monetary policy in the post Keynesian theoretical framework

Philip Arestis
Director of Research, Cambridge Centre for Economic & Public Policy,
Fábio Henrique Bittes Terra
Professor of Instituto de Economia da Universidade Federal de Uberlândia
Brazilian Journal of Political Economy, Vol. 37 No. 1 (2017), Jan-Mar / 2017, Pages 45-64


The purpose of this contribution is to develop a Post Keynesian monetary policy model, presenting its goals, tools, and channels. The original contribution this paper develops, following Keynes’s (1936, 1945) proposals, is the use of debt management as an instrument of monetary policy, along with the interest rate and regulation. Moreover, this paper draws its monetary policy model by broadly and strongly relying on Keynes’s original writings. A monetary policy model erected upon this basis relates itself directly to the Post Keynesian efforts to offer a monetary policy framework substantially different from the Inflation Targeting Regime of the New Macroeconomic Consensus.

JEL Classification: E12; E5; E42.

Keywords: Keynesian theory monetary policy economic policy interest rate debt management.