Credit and finance in today’s mainstream

.

Chapter 9 in Banks and Finance in Modern Macroeconomics, 2019, pp 213-238 from Edward Elgar Publishing

Abstract: The chapter explores the emergence of New Keynesian Economics and the confluence of mainstream macroeconomics to the so-called new neoclassical synthesis, characterized by the important role of market imperfections. Thanks to the abandonment of the hypothesis of perfectly competitive markets and to the emphasis on informational imperfections, a new generation of macroeconomic models made some steps forward in including banks or finance in their interaction with the real economy. But a number of important issues remain open. The chapter highlights the ambiguity of the notion of imperfections and the difficulties arising from still regarding the Arrow-Debreu model as a benchmark. The authors also argue that behavioural finance, by relying on psychological research, offers analyses of the functioning of financial markets far from those of the efficient markets hypothesis and closer to Keynes’s approach. Human behaviour, at the individual and collective levels, cannot be explained by the assumption of fully rational agents optimizing over infinite horizons.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/9781786431523/chapter09.xhtml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:17355_9

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().