Horizontalism: A Critique
AbstractThis article offers a critique of the horizontalist view of money that banks are passive in the face of credit demand. It is argued that banks' liquidity preference influences their responsiveness to the demand for credit. Their liquidity preference is expressed in risk assessment (understood in terms of John Maynard Keynes's theory of uncertainty). It is argued that rationing in the sense of adverse changes in risk assessment occurs systematically in the downturn of the business cycle. Systematic rationing also occurs with respect to particular classes of borrowers; the focus here is on the case of small firms. (c) 1996 Academic Press Limited Copyright 1996 by Oxford University Press.
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Bibliographic InfoPaper provided by University of Stirling, Division of Economics in its series Working Papers Series with number 93/8.
Date of creation: Jun 1993
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- Dow, Sheila C, 1996. "Horizontalism: A Critique," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 20(4), pages 497-508, July.
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- Kevin S. Nell, 2001.
"The Endogenous/Exogenous Nature of South Africa's Money Supply under Direct and Indirect Monetary Control Measures,"
Journal of Post Keynesian Economics,
M.E. Sharpe, Inc., vol. 23(2), pages 313-329, January.
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- Miglierina Enrico & Molho Elena, 2002. "Well-posedness and convexity in vector optimization," Economics and Quantitative Methods, Department of Economics, University of Insubria qf0221, Department of Economics, University of Insubria.
- Jorg Bibow, 2005. "Liquidity Preference Theory Revisited: To Ditch or to Build on It?," Economics Working Paper Archive wp_427, Levy Economics Institute.
- Cavalieri, Duccio, 2004. "On Some Equilibrium and Disequilibrium Theories of Endogenous Money: A Structuralist View," MPRA Paper 43738, University Library of Munich, Germany.
- Jorg Bibow, 2000. "On exogenous money and bank behaviour: the Pandora's box kept shut in Keynes' theory of liquidity preference?," The European Journal of the History of Economic Thought, Taylor & Francis Journals, Taylor & Francis Journals, vol. 7(4), pages 532-568.
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