Loanable Funds, Saving & Investment,And Financial Assets
AbstractWe claim that macroeconomic modeling in terms of financial assets is superior to the more traditional model of loanable funds. One advantage of this perspective is that it allows us to take cognizance of the fact that the world is complex: there are many more than one market involved. It also enables us to shed light on the fallacies of “netting out” consumer borrowing and lending. As well, placing “the” interest rate on the vertical axis is problematic, as there is no invariant measure of the value of an asset. We take the position that the usual analysis of a single money market is a simplistic way to analyze a complicated situation. We argue that a focus on the market for loanable funds leads directly to the erroneous Keynesian money model.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Romanian-American University in its journal Romanian Economic and Business Review.
Volume (Year): 6 (2011)
Issue (Month): 4 (december)
heterogeneous capital; gross and net saving and investment; financial intermediation; hoarding;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harcourt,G. C., 1972.
"Some Cambridge Controversies in the Theory of Capital,"
Cambridge University Press, number 9780521096720, October.
- Harcourt, G C, 1969. "Some Cambridge Controversies in the Theory of Capital," Journal of Economic Literature, American Economic Association, vol. 7(2), pages 369-405, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alex Tabusca).
If references are entirely missing, you can add them using this form.