Over the past decades, the framework for financing has experienced a fundamental shift from traditional bank lending towards a broader market-based financing of financial assets. As a consequence, regulated banks increasingly focus on coping with regulatory requirements meaning that the...

The extensive harm caused by the financial crisis raises the question of whether policy- makers could have done more to prevent the build-up of financial imbalances. This paper aims to contribute to the field of regulatory impact assessment by taking up the revived debate on whether central...

International financial crises have plagued the world in recent decades, including the Latin American debt crisis of the 1980s, the East Asian crisis of the late twentieth century, and the global financial crisis of 2007-09. One of the basic problems faced during these crises is the lack of...

The extensive harm caused by the financial crisis raises the question of whether policy- makers could have done more to prevent the build-up of financial imbalances. This paper aims to contribute to the field of regulatory impact assessment by taking up the revived debate on whether central...

We provide new evidence on the short-run effect of elections on monetary aggregates. We study month-to-month fluctuations in the growth rate of M1 in a sample of 85 low and middle income democracies from 1975 to 2009. The evidence shows an increase in the growth rate of M1 during election months...

The extensive harm caused by the financial crisis raises the question of whether policymakers could have done more to prevent the build-up of financial imbalances. This paper aims to contribute to the field of regulatory impact assessment by taking up the revived debate on whether central banks...

The extensive harm caused by the financial crisis raises the question of whether policymakers could have done more to prevent the build-up of financial imbalances. This paper aims to contribute to the field of regulatory impact assessment by taking up the revived debate on whether central banks...

The paper presents a financial approach to monetary analysis that links the credit and state theories of money. A premise of the functional approach to money is that "money is what money does." In this approach, monetary and mercantile mechanics are conflated, which leads to the conclusion that...

This paper studies banks' liquidity provision in the Lagos and Wright model of monetary exchanges. With aggregate uncertainty we show that banks sometimes exhaust their cash reserves and fail to satisfy their depositors' need of consumption smoothing. The banking panics can be eliminated by the...

The extensive harm caused by the financial crisis raises the question of whether policymakers could have done more to prevent the build-up of financial imbalances. This paper aims to contribute to the field of regulatory impact assessment by taking up the revived debate on whether central banks...

Since the beginning of the fall of monetarism in the mid-1980s, mainstream macroeconomics has incorporated many of the principles of post-Keynesian endogenous money theory. This paper argues that the most important critical component of post-Keynesian monetary theory today is its rejection of...

In the 1990s, the empirical relation between money demand and interest rates began to fall apart. We analyze to what extent improved access to money markets can explain this break-down. For this purpose, we construct a microfounded monetary model with a money market, which provides insurance...

Over the past decades, the framework for financing has experienced a fundamental shift from traditional bank lending towards a broader market-based financing of financial assets. As a consequence, regulated banks increasingly focus on coping with regulatory requirements meaning that the...

During the Great Recession numerous central banks have implemented various unconventional monetary policy measures. This paper aims to empirically evaluate two particular types of unconventional policies (forward guidance and quantitative easing) in a structural manner. The primary aim is to...

Robert W. Clower's article "A Reconsideration of the Microfoundations of Monetary Theory" (1967) deeply influenced the course of modern monetary economics. On the one hand, it revealed the deadlocks of Don Patinkin's project to integrate monetary and Walrasian value theory. On the other hand, it...

The extensive harm caused by the financial crisis raises the question of whether policymakers could have done more to prevent the build-up of financial imbalances. This paper aims to contribute to the field of regulatory impact assessment by taking up the revived debate on whether central banks...

We provide new evidence on the short-run effect of elections on monetary aggregates. We study month-to-month fluctuations in the growth rate of M1 in a sample of 85 low and middle income democracies from 1975 to 2009. The evidence shows an increase in the growth rate of M1 during election months...

We provide new evidence on the short-run effect of elections on monetary aggregates. We study month-to-month fluctuations in the growth rate of M1 in a sample of 85 low and middle income democracies from 1975 to 2009. The evidence shows an increase in the growth rate of M1 during election months...

We develop a microfounded model, where agents have the possibility to trade money for government bonds in an over-the-counter market. It allows us to address important open questions about the effects of central bank purchases of government bonds, these being: under what conditions these...

This paper has two main objectives. The first is to propose a policy architecture that can prevent a very high public debt from resulting in a high tax burden, a government default, or inflation. The second objective is to show that government deficits do not face a financing problem. After...

Marx’s theory of money is critiqued relative to the advent of fiat and electronic currencies and the development of financial markets. Specific topics of concern include (1) today’s identity of the money commodity, (2) possible heterogeneity of the money commodity, (3) the categories of land...

Recent years have witnessed the advances of e-money systems such as Bitcoin, PayPal and various forms of stored-value cards. This paper adopts a mechanism design approach to identify some essential features of different payment systems that implement and improve the constrained optimal resource...

In the post-crisis period, increased regulation of financial intermediaries led to a significant decline in corporate bond market liquidity. In order to stabilize these markets, policy makers recently proposed that the trading of corporate bonds should be more centralized. In this paper, we show...

We develop a dynamic general equilibrium model to analyze the effects of central bank purchases of government bonds by investigating the following three questions: Under what conditions are these purchases socially desirable, what incentive problems do they mitigate, and how large are these...

About the authors -- Preface -- Learning tools walkthrough -- Money and the financial system -- An introduction to money and the financial system -- Money and the payments system -- Interest rates, financial instruments, and financial markets -- Future value, present value, and interest rates --...

Introducing money and the financial system -- Money and the payments system -- Interest rates and rates of return -- Determining interest rates -- The risk structure and term structure of interest rates -- The stock market, information, and financial market efficiency -- Derivatives and...