Towards a New Paradigm in Monetary EconomicsTowards 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. |
Contents
The principles of the new paradigm | 1 |
Reflections on the current state of monetary economics | 7 |
How finance differs | 26 |
The ideal banking system | 43 |
Restricted banking or the banking system of today | 90 |
Market equilibrium | 104 |
From the corn economy to the monetary economy | 117 |
Towards a general equilibrium theory of credit | 137 |
Financial market liberalization | 234 |
Restructuring the banking sector | 239 |
Regional downturns and development and monetary policy | 251 |
The East Asia crisis | 261 |
The 1991 US recession and the recovery | 276 |
The new paradigm and the new economy | 284 |
Concluding remarks | 293 |
| 303 | |
Other editions - View all
Towards a New Paradigm in Monetary Economics Joseph Stiglitz,Bruce Greenwald No preview available - 2003 |
Common terms and phrases
activity adverse aggregate amount analysis argued assets associated assume bank bank's banking system bankruptcy behavior bonds borrowers capital capital adequacy central changes chapter competition concerning constraints costs countries credit rationing crisis curve decrease default demand depend deposits developing discussion economic effects equilibrium equity especially excess exchange expected face fact Figure firms flow funds given greater hence higher interest rates hold impact imperfect important incentives increase individuals inflation instance institutions interest rate charged investment lead lenders lending less limited loans locus long-term lower marginal matters mean monetary policy noted obtain opportunity particular portfolio positive probability problems reason recession reduced regulation regulatory relatively requirements reserve requirements restrictions result risk risk averse risky role shift simply standard Stiglitz supply T-bill rate T-bills taking theory tion variable wealth worth
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