THE ROLE OF MONEY IN THE THEORY OF UNEQUAL ECONOMIC DEVELOPMENT: A POST KEYNESIAN APPROACH

Abstract

The theory of unequal economic development aims at understanding why some regions and/or countries grow more than others. In an attempt to solve this problem, scholars have not explicitly considered money as an important factor. However, according to a post-Keynesian approach, money is not neutral and it has a major role in determining the economy’s dynamic. This paper purports to identify if the theory of unequal economic development incorporates the idea of non neutrality of money in the developing process of a region. It may be concluded that, despite the fact the theories developed by Rosenstein-Rodan (1943), Nurske (1955), Hirschman (1961), and Myrdal (1960) do not make explicit the role of money in this process, most of them imply it as they introduce uncertainty as a crucial factor in determining agents’ behaviour.