Lexington Books Money, Interest, and the Structure of Production: Resolving Some Puzzles in the Theory of Capital (Capitalist Thought: Studies in Philosophy, Politics, and Economics)

Is macroeconomic equilibrium possible under capitalism? How do economic bubbles develop? How does a monetary system influence the market mechanism? Is the return on capital a beneficial feature of the economic system? How does complexity of a capitalist organization influence the market process? Can output under capitalism be easily measured and modeled? Such questions and many others relate to the central concept discussed in the book: heterogeneous structure of production, an envisioned theoretical connection between stages of the capitalist process. An inquiry into the functioning of a capital structure is necessary to understand the workings of the interest rate, savings, aggregate demand, and economic growth. Additionally it provides a theoretical framework to recognize consequences of monetary regimes and interest rate policies performed by the central banks. Capital structure concepts have their place at the center of economic theory as they can provide a broad range of insights into our understanding of the real world. Money, Interest, and the Structure of Production offers key insights in that direction. Review Machaj is one of the best economists in his generation, well versed in the history of economic thought and with full command of the cutting-edge issues of contemporary economics. His book sheds new light on a painfully neglected area of modern macroeconomics. Whereas most economists wander on a Keynesian Odyssey of macroeconomics without capital, Machaj highlights the central and crucial role of the concept of stages of production. He convincingly argues that the latter is necessary to make sense of interest rates, aggregate demand, potential output, and monetary policy. Essential reading.--Guido Hülsmann, Université d'Angers Economists have long disputed over the usefulness of the structure of production in the analysis of capital and interest. This important volume transcends this debate and brings a fresh new perspective to the structure of production by arguing that the concept plays a crucial role in resolving several vexed questions in monetary and macroeconomic theory and policy analysis. Even if the reader does not agree with Machaj on every issue, he or she will be stimulated to rethink the place of real capital in economic theory.--Joseph T. Salerno, Pace University Capital and interest theory has been referred to as the "black hole of economics." Yet in Money, Interest, and the Structure of Production, Machaj shows why economists must not ignore this vital component of analysis. Illustrating his expertise in technical theory as well as the history of economic thought, Machaj demonstrates the relevance of the economy's structure of production to several contemporary disputes.--Robert P. Murphy, Texas Tech University About the Author Mateusz Machaj is assistant professor at the Institute of Economic Sciences, the University of Wroclaw, and research fellow at the Faculty of Social and Economic Studies, Jan Evangelista Purkyne University.