Financial Disequilibrium

Gordon Pepper
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Gordon Pepper: Department of Banking and Finance, City University Business School

Chapter 15 in Money, Credit and Asset Prices, 1994, pp 231-236 from Palgrave Macmillan

Abstract: Abstract This chapter is based on a lecture given by the author to the Marshall Society, Cambridge, in November 1978. It describes how banks are a residual source of finance and how imbalances in the credit market determine the supply of money, which may well be different from the demand for money. The demand for money for transactions purposes depends on the growth of the economy, the rate of inflation and the level of short-term interest rates. The demand for money for savings purposes depends on wealth and on how the rate of interest on bank deposits compares with the expected return on other assets after allowing for differences in risk.

Keywords: Interest Rate; Cash Flow; Asset Price; Banking Sector; Credit Market (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37593-2_16

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DOI: 10.1057/9780230375932_16

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