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Are banks special? Some notes on Tobin's theory of financial intermediaries

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  • Giancarlo Bertocco

Abstract

Since the 1960s, Tobin has set himself the objective of developing a macroeconomic model more general than that specified by Keynes in the General Theory. In his works, he explicitly deals with financial intermediaries and elaborates a ‘new view’ which, in contrast with the ‘old view’, maintains that there are no reasons to attribute a special role to the banks. This paper critically analyses Tobin's theory and shows that this theory overlooks an important function of banks highlighted by Keynes, and that the specification of this banks’ function is the necessary condition to highlight the most significant aspects of what Keynes calls a monetary economy. These points enable us to draw some observations about the question of the financial system regulation.

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  • Giancarlo Bertocco, 2011. "Are banks special? Some notes on Tobin's theory of financial intermediaries," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 16(3), pages 331-353.
    • Handle: RePEc:taf:rjapxx:v:16:y:2011:i:3:p:331-353
    DOI: 10.1080/13547860.2011.589624
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    References listed on IDEAS

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    1. Marc Lavoie, 1992. "Foundations of Post-Keynesian Economic Analysis," Books, Edward Elgar Publishing, number 275.
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    4. L. R. Wray, 1990. "Money and Credit in Capitalist Economies," Books, Edward Elgar Publishing, number 474.
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