Private Finance and Public Policy

Garry Schinasi ()

Research and Policy Notes from Czech National Bank, Research and Statistics Department

Abstract: This paper articulates a logical foundation-drawn from disparate literatures-for understanding why safeguarding financial stability is an important economic policy objective. The paper also explains why private aspects of finance provide broader social economic benefits and have the characteristics of public goods. Unique aspects of finance are examined, as are the linkages between finance, money, and the real economy. Sources of market imperfections in finance are identified and their implications are analyzed. The arguments imply that reaping the full private and social economic benefits of finance requires both private-collective and publicpolicy involvement as well as a delicate balance between maximizing the benefits of positive externalities (and public goods) and minimizing the costs (including potential instabilities) of other sources of market imperfections in finance.

Keywords: Finance; Financial Stability; Money; Market Failures; Public Goods. (search for similar items in EconPapers)
JEL-codes: D52 D61 D62 D82 E42 E44 E51 E58 G14 G18 H41 (search for similar items in EconPapers)
Date: 2006-12
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https://www.cnb.cz/export/sites/cnb/en/economic-re ... nload/rpn_2_2006.pdf

Related works:
Working Paper: Private Finance and Public Policy (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cnb:rpnrpn:2006/02

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