Towards a New Paradigm in Monetary Economics
Cambridge University Press, Sep 4, 2003 - Business & Economics - 327 pages
Towards a New Paradigm for Monetary Economics presents a pioneer treatment of critical topics in monetary economics. Unlike the prevailing monetary theory, this book focuses not on the role of money in facilitating transactions, but on the role of credit in facilitating economic activities more broadly. The 'new paradigm' emphasizes the demand and supply of loanable funds, which in turn requires the understanding of the imperfections of information and the role of banks. One enlightening view is that credit is quite different from other commodities in the sense that the former is based on information and default risk. The book consists of two parts. The first part develops a basic model of credit based on banks' portfolio choices. The second part is dedicated to the policy implications, among which are the liberalization of financial markets, the East Asian Crisis, the 1991 US recession and the subsequent recovery.
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The principles of the new paradigm
Reflections on the current state of monetary economics
How finance differs
The ideal banking system
Restricted banking or the banking system of today
From the corn economy to the monetary economy
Towards a general equilibrium theory of credit
Financial market liberalization
Restructuring the banking sector
Regional downturns and development and monetary policy
The East Asia crisis
The 1991 US recession and the recovery
The new paradigm and the new economy
Other editions - View all
adverse selection aggregate demand amount analysis assets bank's banking system bankruptcy costs borrowers capital adequacy requirements capital adequacy standards capital market chapter constraints countries credit rationing crisis decrease demand and supply deposit rates depositors downturn East Asia economic activity effectiveness of monetary equilibrium equity exchange rate expected return Figure firms franchise value government bonds higher interest rates hold impact imperfect incentives increase in interest indifference curves inflation interest rate charged investment lead lenders lending activity lending rate liquidity trap loan portfolio long-term bonds lower interest rates macro-economic mean-variance monetary policy nominal interest rates offset opportunity locus opportunity set probability of default problems Raffaele Mattioli real interest rates recession reduced regulation reserve requirements restricted banking restructuring result risk averse risk neutral risk taking risky role shift short-term simply Stiglitz substitution effect supply of credit T-bill rate theory tion variable wealth effect worth
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