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TERRA ECONOMICUS

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  • 2023
  • No 3
  • An institutional perspective on money circulation: The heterodox approach

An institutional perspective on money circulation: The heterodox approach


TERRA ECONOMICUS, , Vol. 21 (no. 3),

The paper aims at substantiating and applying the heterodox approach to analyze institutions related to money circulation in Russia. Orthodox economics, along with orthodox monetary theories, are usually associated with countries where the institutions of Y-matrix and market Y-economy have dominated throughout history. Russia is featured by the institutions of X-matrix and redistributive X-economy. This fact makes heterodox approach applicable to Russia, as well as to some other countries, that is confirmed by a comparison between orthodox and heterodox approaches to money circulation presented in the paper. Heterodox perspective is more practically-oriented and enables the researcher to address objectively institutions related to money circulation in terms of dynamics, uncertainty, and irreversibility. A special focus is placed on the social context associated with money circulation, including the embeddedness of relevant institutions in the system of non-economic institutions, the factor of trust, and their role in social stratification reproduction. Applying the heterodox approach combined with the institutional matrices theory, we identified the features of institutions related to money circulation in the USSR and post-Soviet Russia. In both cases, two periods of money circulation institutionalization are specified, namely, “transitional” and “stabilizing” ones. Transitional periods (New Economic Policy of the 1920s in the Soviet time and the 1990s in post-Soviet Russia) were characterized by the active implementation of Y-matrix institutions which, however, reached a critical limit. After that the stabilizing periods began, featured by the spread and dominance of updated X-matrix institutions. Our findings suggest an optimistic forecast regarding the effectiveness of emergent institutions related to money circulation in modern Russia. In this area there is a constant search for institutional balance and synthesis of dominant X-institutions and complementary Y-institutions, which did not exist in the USSR.
Citation: Kirdina-Chandler S.G. (2023). An institutional perspective on money circulation: The heterodox approach. Terra Economicus21(3), 45–57 (in Russian). DOI: 10.18522/2073-6606-2023-21-3-45-57


Keywords: circulation of money; institutional analysis; heterodox economics; institutional matrices theory; institutional balance; synthesis; USSR; post-Soviet Russia

JEL codes: E42, B15, B52, E02, G20, P00

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606