Journal Article

No. 2013-40 | November 06, 2013
On the Bottom-up Foundations of the Banking-Macro Nexus PDF Icon

Abstract

The complexity of credit-money is conceived as the central issue in the banking-macro nexus, which the author considers as a structural as well as process component of the evolving economy. This nexus is significant for the stability as well as the fragility of the economic system, because it connects the monetary 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 properties and characteristics of this evolutionary process are discussed in three sections. First, the author looks into the origins of the theory of money and its role for contemporary monetary economics. Second, he briefly discusses current theoretical foundations of top-down as well as bottom-up approaches to the banking-macro nexus, such as dynamic stochastic general equilibrium and agent-based models. In the third part he suggests an evolutionary framework, building on a generic rule-based approach, to arrive at standards for bottom-up foundations in agent-based macroeconomic models with a banking sector.

JEL Classification

E02 B25 B52 E41 E51 G21 C63

Citation

Manuel Wäckerle (2013). On the Bottom-up Foundations of the Banking-Macro Nexus. Economics: The Open-Access, Open-Assessment E-Journal, 7 (2013-40): 1—45. http://dx.doi.org/10.5018/economics-ejournal.ja.2013-40

Assessment

Downloads: 1464 (Journalarticle: 625, Discussionpaper: 839)
external link Search this article at Google Scholar



Comments and Questions