Discussion Paper

No. 2013-5 | January 11, 2013
On the Bottom-up Foundations of the Banking-Macro Nexus


The complexity of credit money is seen as the central issue in the banking-macro nexus, which the author considers as a structural as well as a process component of the evolving economy. This nexus is significant for the stability/fragility of the economic system because it links the monetary domain with the real domain of economic production and consumption. The evolution of credit rules shapes economic networks between households, firms, banks, governments and central banks in space and time. The author discusses the properties and characteristics of this process in three sections. First, he discusses the origins of the theory of money and its role in contemporary monetary economics. Second, he briefly discusses current theoretical foundations of top-down and bottom-up approaches to the banking-macro nexus, such as DSGE or ABM. Third, he suggests an evolutionary framework, building on the generic-rule based approach, to arrive at standards for bottom-up foundations in agent-based models of the banking-macro nexus.

Paper submitted to the special issue
Economic Perspectives Challenging Financialization, Inequality and Crises

JEL Classification:

B25, B52, E41, G21, C63, E51


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Cite As

Manuel Wäckerle (2013). On the Bottom-up Foundations of the Banking-Macro Nexus. Economics Discussion Papers, No 2013-5, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2013-5

Comments and Questions

Anonymous - Referee Report 1
January 21, 2013 - 12:22

see attached file

Manuel Wäckerle - Response to Referee Report 1
March 16, 2013 - 22:37

Please see attached file.

Anonymous - Referee Report 2
February 22, 2013 - 09:49

see attached file

Manuel Wäckerle - Response to Referee Report 2
March 16, 2013 - 22:38

Please see attached file.