The Dynamic Analysis of Monetary Policy Shock on Banking Behaviour

Edwin Le Heron

Chapter 5 in Issues in Finance and Monetary Policy, 2007, pp 73-99 from Palgrave Macmillan

Abstract: Abstract In Keynes’s General Theory, the ‘monetary authorities’ are considered to act as a deus ex machina: they should resolve all the problems regarding the creation and control of money. The banking system and financial institutions are analysed solely in terms of central bank activities.1 The supply of money is fixed exogenously by the central bank. An endogenous theory of the demand for money co-exists with an endogenous theory of the interest rate (liquidity preference).2

Keywords: Interest Rate; Monetary Policy; Central Bank; Commercial Bank; Money Supply (search for similar items in EconPapers)
Date: 2007
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Working Paper: The Dynamic Analysis of Monetary Policy Shock on Banking Behaviour (2007)
Working Paper: The Dynamic Analysis of Monetary Policy Shock on Banking Behaviour (2005)
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DOI: 10.1057/9780230801493_5

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