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19 Cards in this Set
- Front
- Back
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Name three impacts of market imperfection in financial markets according to the New Consensus view.
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1. Strong/Semi-strong market efficiency is not possible
2. Banks emerge to complement financial markets 3. Short term bubbles can appear |
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What is the role of banks according to the New Consensus?
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They are intermediaries between savers and investors
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What is the direct impact of financial markets according to Post Keynesians?
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Make illiquid assets liquid
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Why can't aggregate saving precede aggregate investment in Post Keynesianism?
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I -> Y -> S
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What is the purpose of banks in Post Keynesian analysis?
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They allow financing of economic activity and they are experts at judging credit worthiness
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According to New Consensus, what is the best way to promote investment?
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Promote savings
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According to Post Keynesian views, what is the best way to promote investment?
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Promote spending
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According to the exchange view, what is a must-have quality for the medium of exchange?
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Easy to carry
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According to the exchange view, what function must monetary intruments perform to be detected?
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Medium of exchange
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According to the exchange view, what are the origins of money?
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Money emerged from commercial transactions
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According to the exchange view, what was the last form of money to emerge?
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Immaterial
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According to the alternative approach, what is the most common form of money?
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Immaterial
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According to the alternative approach, why is inappropriate to talk about the dematerialization of money?
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Monetary instruments were first immaterial
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According to the alternative approach, where does money come from?
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Money emerged from the need to make sacral payments
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What is a characteristic of a monetary instrument under the alternative approach?
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Circulates at PAR
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According to the multiplier theory, what is the main barrier to monetary creation?
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The amount of reserve
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Under the liquidity/solvency vuew, which of the following is the main barrier to monetary creation?
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The cost of getting reserves
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Under solvency/liquidity, how does a bank create the need for reserves?
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Loans/advances create deposits and deposits create the need for reserves
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According to solvency/liquidity, do central banks have control of reserves?
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No
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