Post-keynesian approach to independence of central bank and function of commercial banks
AbstractThe post-Keynesian approach to the nature of money brings some other conclusion to the monetary policy, independence of a central bank and function of commercial banks. The source money is created by demand of businessmen especially. Loans create deposits, deposits create reserves. Central bank plays two roles: lender of last resort and inflation supervisor. Creditting by commercial banks and their credit policy in post-Keynesian economics is considered as credit rationing. If the role of central bank - lender of last resort - is not connected with changes of regulation, which reduce new practice of financial markets to avoid regulation, the influence of central bank to fight with inflation declines. Post-Keynesian economics is not directed against competence and independence of central bank. On the contrary, it welcomes the more direct influence of central bank on commercial banks and other financial institutions, however, with use of alternative limiting facilities.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Politická ekonomie.
Volume (Year): 2003 (2003)
Issue (Month): 5 ()
Postal: Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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