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Interrelated Bank Strategies, Financial Fragility And Credit Expansion: A Post Keynesian Approach

Author

Listed:
  • Antonio J. Alves Jr.
  • Gary A. Dymski
  • Luiz Fernando de Paula

Abstract

This paper aims at clarifying the relationship between individual bank and banking industry behavior in credit expansion. We argue that the balance sheet structure of an individual bank is only partially determined by its management decision about how aggressively to expand credit; it is also determined by the balance sheet positions of other banks. This relationship is explicitly shown by a disaggregation of the variable that enters into the simple money multiplier. The approach developed here opens a way to integrating the micro and macro levels in a Keynesian banking-system analysis.

Suggested Citation

  • Antonio J. Alves Jr. & Gary A. Dymski & Luiz Fernando de Paula, 2004. "Interrelated Bank Strategies, Financial Fragility And Credit Expansion: A Post Keynesian Approach," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 077, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2004:077
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    File URL: http://www.anpec.org.br/encontro2004/artigos/A04A077.pdf
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    References listed on IDEAS

    as
    1. Gary A. Dymski, 1988. "A Keynesian Theory of Bank Behavior," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 10(4), pages 499-526, July.
    2. Marc Lavoie, 1992. "Foundations of Post-Keynesian Economic Analysis," Books, Edward Elgar Publishing, number 275.
    3. L. R. Wray, 1990. "Money and Credit in Capitalist Economies," Books, Edward Elgar Publishing, number 474.
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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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