A context-driven approach to endogenous money: from instruments to systems

This paper advocates for a context-driven approach to endogenous money theory, building critically on Victoria Chick's contributions.We first revisit the debate between horizontalists and structuralists, showing that common grounds exist, at least in part.We then revisit the debate between the revolutionary and evolutionary approaches, showing that both share common limitations: a market-centric reading of monetary history and a tendency to generalize from stable, developed economies.The revolutionary claim that money creation has been universally endogenous faces significant difficulties when confronted with the historical and anthropological record, while the evolutionary approach, though more historically grounded, risks imposing linear trajectories that overlook institutional reversibility and non-Western experience.To move beyond these limitations, we ground our approach in the analytical distinction between monetary instruments and monetary systems.Any monetary system comprises multiple instruments with distinct issuance mechanisms, regulatory constraints, and degrees of demand-responsiveness.Systemic endogeneity is therefore not a fixed property of money but an emergent outcome of the interaction between instruments within a specific institutional, legal, and geopolitical context.We use the exemple of Gaza, where monetary fragmentation and geopolitical constraints produce a configuration that existing post-Keynesian frameworks cannot adequately characterize.We then formalize a four-step analytical procedure to identify instrumental and systemic monetary endogeneity.The approach is not confined to extreme cases: it offers a general methodology for analyzing any economy whose monetary system is a composite of overlapping instruments.