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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Quashing The Financial Firestorm, Aaron S. Edlin
Quashing The Financial Firestorm, Aaron S. Edlin
Aaron Edlin
Start the financial rescue with containment, establish unlimited deposit insurance and continuous access to funds, then move to a well thought-out plan to quash the financial flames.
Macroeconomics Without The Lm: A Post-Keynesian Perspective, Thomas Palley
Macroeconomics Without The Lm: A Post-Keynesian Perspective, Thomas Palley
PERI Working Papers
Romer (2000) provides an alternative model to the AS/AD and IS/LM models that abandons the LM schedule by having the short-term interest rate set by the central bank. His framework acknowledges the critical role of the central bank in determining short-term interest rates, which moves mainstream macroeconomics closer to Post Keynesian monetary theory. The current paper presents a Post Keynesian construction of macroeconomics without an LM schedule. Rather than describing the financial sector in terms of an exogenously determined interest rate set by the central bank, the model unpacks financial markets by fully specifying a banking sector. The key analytic …
Another Example Of A Credit System That Coexists With Money, Gabriele Camera, Yiting Li
Another Example Of A Credit System That Coexists With Money, Gabriele Camera, Yiting Li
Economics Faculty Articles and Research
We study an economy in which exchange occurs pairwise, there is no commitment, and anonymous agents choose between random monetary trade or deterministic credit trade. To accomplish the latter, agents can exploit a costly technology that allows limited recordkeeping and enforcement. An equilibrium with money and credit is shown to exist if the cost of using the technology is sufficiently small. Anonymity, record-keeping and enforcement limitations also permit some incidence of default, in equilibrium.