The recent great financial crisis and the ensuing deep recessions have placed in sharp relief the fundamental issue of how financial factors, including financial instability, interact with the real economy. In order to understand the nature of these interactions and formulate policies that would...

The recent great financial crisis and the ensuing deep recessions have placed in sharp relief the fundamental issue of how financial factors, including financial instability, interact with the real economy. In order to understand the nature of these interactions and formulate policies that would...

How do fluctuations in Keynes’s notion of aggregate effective demand and their nominal income and expenditure counterparts divide into output and price level changes? Friedman called this the “missing equation” problem, and declared that neither Keynesians, nor Monetarists, nor he had...