Towards a New Paradigm in Monetary Economics

A pioneer treatment of monetary economics written by two of world's leading authorities.

Joseph Stiglitz (Author), Bruce Greenwald (Author)

9780521008051, Cambridge University Press

Paperback, published 4 September 2003

344 pages
21.6 x 13.9 x 2.3 cm, 0.488 kg

'Overall this is an excellent contribution to our understanding of the functioning of modern financial markets. It will become essential reading for students, researchers, practitioners and policy-makers with an interest in the behaviour of monetary and financial systems.' Journal of International Development

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.

Introduction
Part I. Theory: 1. Reflections on the current state of monetary economics
2. How finance differs
3. The ideal banking system
4. Restricted banking
5. Market equilibrium
6. From the corn economy to the monetary economy
7. Towards a general equilibrium theory of credit
Part II. Applications: 8. Monetary policy
9. Regulatory policy and the new paradigm
10. Financial market liberalization
11. Restructuring the banking sector
12. Regional downturns and development of monetary policy
13. The East Asia Crisis
14. The 1991 US recession and the recovery
15. The new paradigm and the new economy
16. Concluding remarks.

Subject Areas: International economics [KCL], Macroeconomics [KCB], Economics [KC]