On the bottom-up foundations of the banking-macro nexus

Manuel Wäckerle

Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), 2013, vol. 7, No 2013-40, 45 pages

Abstract: The 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.

Keywords: 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 (search for similar items in EconPapers)
JEL-codes: B25 B52 C63 E02 E41 E51 G21 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifweej:201340

DOI: 10.5018/economics-ejournal.ja.2013-40

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