Endogenous Money and the Supermultiplier

This book explores the Supermultiplier model which has rapidly evolved into a key analytical framework, embraced and debated by post-Keynesian economists across various schools of thought. At its core, the model extends Keynesian principles to the long run, asserting that economic growth and productive capacity are fundamentally shaped by effective demand. Central to this framework is the concept of autonomous demand—components of aggregate demand such as government spending, exports, and residential investment and credit-financed consumption that operate independently of income flows, driving growth and capital accumulation.

This book ventures into the relatively uncharted territory of how these autonomous demand components are financed. It highlights the indispensable role of endogenous money creation—credit expansion, state money, and external sector financing—in sustaining demand-led growth. Drawing from recent contributions, the book integrates credit and debt dynamics into the Supermultiplier model, offering insights into the financial underpinnings of autonomous demand.

A vital resource for understanding modern monetary economies, this book bridges theoretical advancements and practical policy implications, making it essential reading for economists, policymakers, and those intrigued by the intersection of demand, finance, and growth.

The chapters in this book were originally published in Review of Political Economy.

Maria Cristina Barbieri Góes is Assistant Professor at the LINK Campus University, Rome, Italy, and the co-editor of the Review of Political Economy. Her research activity is focused on post-Keynesian economics, growth theory, fiscal and monetary policies, and income distribution. Her scientific contributions were published in various journals.

Óscar Dejuán Asenjo is Full Professor of Economics at the University of Castilla–La Mancha (FCEE of Albacete, Spain). His research has been focused on: growth and crisis, unemployment, Sraffian economics, post-Keynesian economics, input-output analysis, and the Supermultiplier model.

Riccardo Pariboni is Associate Professor at the University of Siena, Italy. After three years as a postdoctoral fellow at the Department of Economics of Roma Tre University, Italy, he was appointed Visiting Professor at the Freie Universität in Berlin, Germany. Then, he joined the Max Planck Institute for the Study of Societies (Cologne) as a postdoctoral fellow. His research interests are growth theory, income distribution, and post-Keynesian economics, but he has also worked on environmental issues and labour market dynamics.

Ricardo Summa is Associate Professor at the Federal University of Rio de Janeiro, Brazil, and co-editor of the Review of Keynesian Economics. His research interests are growth theory, conflict inflation and income distribution, endogenous money in open economies, and macroeconomic policies.