Macro Micro Model with a Post-keynesian Perspective in the banking industry

cho, hyejin (2014): Macro Micro Model with a Post-keynesian Perspective in the banking industry.

Abstract

This article introduces the cascaded individual model of Post-keynesian economics. This differs from the representative agent model of the old-keynesian model mathematically and methodologically. The model builds from five assumptions containing original concepts: cascaded individuals, a social planner vs a regulator, aggregate deposits (stock) vs pyroclastic deposits (flow). Mainly, this Macro-Micro approach of Post-keynesian concepts suggests the regulation of the money flow. Then, this paper articulates fundamental concepts to solve problems of a sudden "micro" financial shock in the short run with the long run "macro" stabilization with a balanced perspective between macroeconomics and microeconomics.

• Item Type: MPRA Paper
• Language: English
• Keywords: macro micro model, Post-keynesian, banking industy, general equilibrium, endogenous money creation, representative agents, cascaded individuals, aggregate deposits, pyroclastic deposits, social planner, regulator, moral hazard problem
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; G - Financial Economics > G0 - General; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations

References

Jespersen, J. (2009) Macroeconomic Methodology. Edward Elgar Publishing Limited. Majumdar, M. (2009) Equilibrium, Welfare, and Uncertainty: Beyond Arrow-Debreu. Routledge.

Freixas, X., Rochet, J.C. (1999) Microeconomics of Banking. The MIT press.

Gorton, G., Winton, A. (1995) Bank Capital Regulation in General Equilibrium. Wharton School. University of Pennsylvania. Philadelphia.

Hicks, J. (19801981) IS-LM: An Explanation. Journal of Post Keynesian Economics. v. 3: 139155

Fisher, I. (1930) The Theory of Interest as determined by impatience to spend income and opportunity to invest it. The Macmillan Company, New-york.

Wicksell, K. (1936) Interest and Prices - A Study of the Causes Regularing the Value of Money. Sentry Press. New-york.

Barnett, W. A. and Solow, R. (2004) An Interview with Franco Modigliani.

Tobin, J. (1963) Commercial Banks as Creators of Money. Banking and Monetary Studies: P.408-419.

Knapp, G. F. (1924) The State Theory of Money. Macmillan. London

Basil, M. (1988) Horizontalists and Verticalists: The Macroeconomics of Credit Money. Cambridge University Press.

Acemoglu, D. (2009) Introduction to Modern Economic Growth. Princeton University Press.

Friedman, M. (1970) A Theoretical Framework for Monetary Analysis. Journal of Political Economy: P.193-238.

Keen, S. (2009) The Dynamics of the Monetary Circuit. The Political Economy of Monetary Circuits: Tradition and Change in Post-Keynesian Economics.

Board of Governors of the Federal Reserve System. (2014) Money Stock Measures - H.6. retrieved from http://www.federalreserve.gov/releases/h6.

Ayres, R. U. and Warr, B. (2004) Accounting for Growth: The role of Physical Work.

Cha, H. J. (2007) Central Bank Theory. Yulgok.

Cho, H. J. (2014) Bank Capital Regulation (BCR) model. not published.

Sexton, R. and Fortura, P. (2005) Exploring Economics. Nelson College.

Wikipedians (2011) Economics. Pedia Press.