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Towards a Reformulation of Monetary Theory: Competitive Banking / Joseph E. Stiglitz, Bruce Greenwald.
- Format:
- Book
- Author/Creator:
- Stiglitz, Joseph E.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w4117.
- NBER working paper series no. w4117
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Towards a Reformulation of Monetary Theory
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1992.
- Summary:
- This paper, after providing a critique of standard monetary theory based on the transactions demand for money, examines the effect of monetary policy (changes in reserve requires and open market operations) in a model with competitive, risk averse banks. The effects of changes in bank net worth and bank's risk perceptions are also analyzed. In deep recessions, monetary policy may be ineffective because banks are unwilling to lend. The effects of monetary policy are, at most, only partially mediated through changes in the interest rate. The implications for traditional IS-LM analysis are briefly noted.
- Notes:
- Print version record
- July 1992.
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