Thomas The Creators of Inside Money

A New Monetary Theory
1. Auflage 2018
ISBN: 978-3-319-90257-9
Verlag: Springer International Publishing
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 186 Seiten

Reihe: Progress in Mathematics

The book explores the endogenous creators of inside money, the commercial banks, and their key role in igniting the 2007-8 monetary crisis and the aftermath of the Great Recession. This is an area of study overlooked by the traditional approach in the form of neo-classical analysis, a body of theory based on a barter system of exchange. Money has evolved from a construct of barter to become a medium of exchange based on fiat money and loan creation by the banking system, underpinned by legal tender, and therefore, a creature of law. It is not a phenomenon exogenously controlled by the monetary authorities and simply assumed to be a 'veil' over the real economy, which just determines the absolute price level. This monograph, in the eyes of the student, represents critical thinking and the realization of a more precise formulation of the endogenous money supply with various features systematically added in an attempt to derive a fully dynamic model of the monetary system, which will be straightforward to visualize and contrast with the benchmark approach.



D. Gareth Thomas is a Senior Lecturer in Economics at the University of Hertfordshire where he has been since 1990. He received a BA (Hons.) degree in Social Sciences from the Central London Polytechnic (now the University of Westminster), and a MSc degree in Economics from Birkbeck College, University of London, alongside a Postgraduate Certificate in Education from St. Mary's College, Institute of Education, University of London. Finally, he received a PhD in the econometric modelling of real investment from the University of Hertfordshire. Prior to joining the Hertfordshire Business School, he was a schoolteacher and the Head of Economics at Longdean School, Hemel Hempstead. His research interests include econometrics and monetary and health economics. He is the author of a number of research articles and has presented at numerous conferences. In 2010, he was highly commended for teaching excellence as Tutor of the Year by the University of Hertfordshire.

Autoren/Hrsg.

Thomas, D. Gareth

Inhaltsverzeichnis

1;The Creators of Inside Money;2
1.1;Preface;6
1.2;Contents;18
1.3;List of Figures;20
1.4;List of Tables;22
2;Chapter 1 The Need for a Financial System?;23
2.1;1.1 Introduction;23
2.2;1.2 Saving and Lending;25
2.3;1.3 Borrowing;26
2.4;1.4 Lending, Borrowing and Wealth;26
2.5;1.5 Financial Institutions;27
2.6;1.6 Financial Markets;27
2.7;1.7 The Real Economy and the Financial System;29
2.7.1;1.7.1 All Money is a Matter of Belief;33
2.8;References and Further Reading;35
3;Chapter 2 The Money Supply;37
3.1;2.1 Introduction;37
3.2;2.2 The Beginnings of a Monetary Analysis;38
3.3;2.3 Modelling the Interaction of Agents;42
3.4;2.4 Conclusion/Summary;49
3.5;References and Further Reading;50
4;Chapter 3 The Adjustment Process of the Money Multiplier and the Loanable Funds Model;51
4.1;3.1 Introduction;51
4.2;3.2 The Geometric Mechanism and the Rounds;51
4.3;3.3 The Loanable Supply Function;55
4.4;3.4 The Loanable Demand Function and the Equilibrium in the Market;56
4.5;3.5 Money in an Open Economy;60
4.6;3.6 Conclusion/Summary;62
4.7;Further Reading;64
5;Chapter 4 The Demand for Money: Another Piece of the Jigsaw Puzzle;65
5.1;4.1 Introduction;65
5.2;4.2 The Demand for Money;67
5.3;4.3 The Inventory Approach;68
5.4;4.4 The Precautionary Motive;73
5.5;4.5 The Speculative Demand for Money;74
5.6;4.6 Money Demand and the Rate of Inflation;78
5.7;4.7 The Monetarists’ Revival of the Quantity Theory of Money;79
5.8;4.8 The Determination of the Rate of Interest on Savings;81
5.9;4.9 Conclusion/Summary;83
5.10;References and Further Reading;83
6;Chapter 5 The Rate of Interest and the New Monetary Theory of Loanable Funds;85
6.1;5.1 Introduction;85
6.2;5.2 Definition and Composition of Nominal Interest Rates;86
6.3;5.3 Classical Version of Interest Determination: Loanable Funds Theory (LFT);86
6.4;5.4 The Real Rate of Interest in LFT;87
6.5;5.5 The Introduction of the Rate of Inflation;88
6.6;5.6 The Fisher Effect;90
6.7;5.7 Liquidity Preference Theory (LPT);90
6.8;5.8 An Alternative Theory: The New Loanable Funds Theory;92
6.9;5.9 Conclusion/Summary;97
6.10;References and Further Reading;97
7;Chapter 6 The Term Structure of Interest Rates;99
7.1;6.1 Introduction;99
7.2;6.2 The Effect of Term;99
7.3;6.3 The Effect of Risk;102
7.4;6.4 The Expectations Theory;103
7.5;6.5 The Segmented Markets Theory;105
7.6;6.6 The Liquidity Premium and the Preferred Habitat Theories;105
7.7;6.7 Using the Term Structure of Interest Rates in the New Loanable Funds Theory;107
7.8;6.8 Conclusion/Summary;109
7.9;Appendix A: An Econometric Case Study: Does the Expectations Theory Exist?;109
7.10;References and Further Reading;117
8;Chapter 7 The Loanable Funds Cycle and the Variability of the Deposit Base;118
8.1;7.1 Introduction;118
8.2;7.2 The Loanable Funds Cycle;119
8.3;7.3 Three Types of Borrowers;120
8.4;7.4 Inflation and Expansion;124
8.5;7.5 Sowing the Seeds for a Crisis;125
8.6;7.6 Deflation and Stagnation;126
8.7;7.7 Recovery and Growth;132
8.8;7.8 Conclusions/Summary;133
8.9;Appendix A;135
8.10;Appendix B: A Portfolio Theory of Loanable Funds: Default and Risk;136
8.11;References and Further Reading;142
9;Chapter 8 A Catastrophe Theory of the Endogenous Cycle of Loanable Funds;143
9.1;8.1 Introduction;143
9.2;8.2 The Catastrophe Theory of the Endogenous Cycle of Loanable Funds;145
9.3;8.3 The Conclusions to Be Drawn;157
9.4;References and Further Reading;158
10;Chapter 9 Rebuilding the Theoretical Model of Inflation on Credit with Loanable Funds;160
10.1;9.1 Introduction;160
10.2;9.2 The Theories of Inflation;161
10.3;9.3 The Proposed Theoretical Model of Inflation with Loanable Funds;163
10.4;9.4 Conclusions/Summary;170
10.5;Appendix;171
10.6;References and Further Reading;172
11;Chapter 10 The Conclusions and the Policy Recommendations;174
11.1;10.1 Introduction;174
11.2;10.2 Stability of an Asymmetrical Economy;174
11.3;10.3 The Possibility of More Stabilisers;177
11.4;10.4 The Conclusion;178
12;Index;180