On the bottom-up foundations of the banking-macro nexus
AbstractThe complexity of credit-money is conceived as the central issue in the banking-macro nexus, which the authors consider as a structural as well as process component of the evolving economy. This nexus is significant for the stability as well as the fragility of the economic system, because it connects the monetary with the real domain of economic production and consumption. The evolution of credit rules shapes economic networks between households, firms, banks, governments and central banks in space and time. The properties and characteristics of this evolutionary process are discussed in three sections. First, the authors look into the origins of the theory of money and its role for contemporary monetary economics. Second, they briefly discuss current theoretical foundations of top-down as well as bottom-up approaches to the banking-macro nexus, such as dynamic stochastic general equilibrium agent-based models. In the third part they suggest an evolutionary framework, building on a generic rule-based approach, to arrive at standards for bottom-up foundations in agent-based macroeconomic models with a banking sector. --
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Bibliographic InfoArticle provided by Kiel Institute for the World Economy in its journal Economics: The Open-Access, Open-Assessment E-Journal.
Volume (Year): 7 (2013)
Issue (Month): 40 ()
Twentieth-century origins of the theory of money; credit-driven innovation; endogenous money; top-down versus bottom-up; credit supply and demand rules; institutional approach; evolutionary macroeconomics;
Find related papers by JEL classification:
- E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
- B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- 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
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
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.:
- de Bondt, Gabe & Maddaloni, Angela & Peydró, José-Luis & Scopel, Silvia, 2010. "The euro area Bank Lending Survey matters: empirical evidence for credit and output growth," Working Paper Series 1160, European Central Bank.
- Bargigli, Leonardo & Gallegati, Mauro, 2013.
"Finding communities in credit networks,"
Economics - The Open-Access, Open-Assessment E-Journal,
Kiel Institute for the World Economy, vol. 7(17), pages 1-39.
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