This textbook by Wendy Carlin and David Soskice offers a comprehensive model that integrates the financial system with macroeconomics. The book is intended for students and professionals seeking deeper understanding of the analysis of economic change, in both stable periods and times of crisis.
Contents
The authors connect the modern monetary framework, based on the well-known three equations of the demand side, the supply side, and the policymaker, with a detailed model of the financial system. This makes it possible to overcome the limitations of traditional macroeconomic models, revealed by the financial crisis and the Eurozone crisis.
The approach consists of three steps: first, they explain how the margin on loans arises and how money creation works within commercial banking. Second, they describe the risks of the financial system and the consequences for the public budget, with the importance of continuity in banks at the center. Finally, they present a model for the behavior of highly leveraged financial institutions, which explains the cycle of financial leverage.
In addition, the model is extended to the open economy, with attention to global imbalances and common currency areas, such as the Eurozone.
Product specifications
- Author: Wendy Carlin (Professor of Economics, University College London)
- Publisher: Oxford University Press
- Publication date: 2014-11-20
- Number of pages: 680
- ISBN: 9780199655793
- Subject: Macroeconomics
- BISAC: BUSINESS & ECONOMICS / Economics / Macroeconomics
About the authors
Wendy Carlin is Professor of Economics at University College London and affiliated with the Centre for Economic Policy Research.
David Soskice is Professor of Political Science and Economics at the London School of Economics and Political Science.