Rethinking monetary and financial stability

Faruk Ülgen

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Abstract: The neoclassical real-economic equilibrium mainly rests on the competitive-efficient-market hypothesis and regards money and finance as mere appendices. Monetary stability is related to price stability and neutral monetary policy, and financial stability to the allocative efficiency of financial intermediation. Subsequent policies assume that financial markets can self-regulate in case of shocks and do not aim to strengthen public control over the financial system. However, the recurrent crises of the last decades point out that liberalized/deregulated financial markets are prone to systemic crises fuelled by endogenous dynamics. New regulatory alternatives are then required to ensure systemic stability.

Keywords: monetarry stability; financial stability; financial system; liberalization; crisis (search for similar items in EconPapers)
Date: 2017
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Published in Rochon, L.-P.; Rossi, S. A modern guide to rethinking economics, Edward Elgar, pp.217-239, 2017, ⟨10.4337/9781784717216.00022⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01592992

DOI: 10.4337/9781784717216.00022

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