Gerhard Illing - Böcker

Financial crises have become more frequent over the last two decades than they were previously. This book illuminates the fierce debate over how the monetary authorities should handle these crises by bringing together a selection of the best writings on the subject and by reflecting all viewpoints.

Financial crises, often of an apparently contagious nature, have become more frequent over the last two decades than they were previously. The monetary authorities, especially central banks, and, in the international context, the International Monetary Fund, have had to decide how to handle them. This has revived interest in the analysis of the role of a Lender of Last Resort (LOLR). On the one hand, such LOLR support actions have been accused of contributing to the currently increased frequency of (systemic) crises. By providing a safety net for banking activities, they are said to encourage excessive risk taking (moral hazard), thus provoking the very crises they are supposed to prevent. On the other hand, the (surprisingly) fast recovery experienced after (most of) these crises may, perhaps, be attributed to the safety net provided by LOLR facilities, which may have dampened real effects by containing contagion. Currently, the need for, and the appropriate design of, a LOLR both at the national and international level is hotly debated. There are fierce controversies about how to handle crisis management.This book assembles a selection of the best available studies in this field, and illuminates both sides of the debate. After a substantial review of the literature, Part I Iooks back to the historical evolution of thought on the conduct of LOLR. Parts II and III review contemporary contributions to the debate. Part IV explores the international aspects of these issues. Overall, this Reader provides comprehensive and authoritative coverage of the contending views on how the authorities might respond to financial crises. It will appeal to a broad readership including financial and monetary economists, commentators on financial subjects, (central) bankers, financial regulators, and ministries of finance.

This textbook provides an introduction to modern monetary economics for advanced undergraduates, highlighting the lessons learned from the recent financial crisis. The book presents both the core New Keynesian model and recent advances, taking into account financial frictions, and discusses recent research on an intuitive level based on simple static and two-period models, but also prepares readers for an extension to a truly dynamic analysis. Further, it offers a systematic perspective on monetary policy, covering a wide range of models to help readers gain a better understanding of controversial issues. Part I examines the long-run perspective, addressing classical monetary policy issues such as determination of the price level and interaction between monetary and fiscal policy. Part II introduces the core New Keynesian model, characterizing optimal monetary policy to stabilize short-term shocks. It discusses rules vs. discretion and the challenges arising from control errors, imperfect information and robustness issues. It also analyzes optimal control in the presence of an effective lower bound. Part III focuses on modelling financial frictions. It identifies the transmission mechanisms of monetary policy via banking and introduces models with incomplete markets, principal-agent problems, maturity mismatch and leverage cycles, to show why investors’ and intermediaries’ own stakes play a key role in lending with pro-cyclical features. In addition, it presents a tractable model for handling liquidity management and demonstrates that the need to sell assets in crisis amplifies the volatility of the real economy. Lastly, the book discusses the relation between monetary policy and financial stability, addressing systemic risk and the role of macro-prudential regulation.

This textbook provides an introduction to modern monetary economics for advanced undergraduates, highlighting the lessons learned from the recent financial crisis. Part I examines the long-run perspective, addressing classical monetary policy issues such as determination of the price level and interaction between monetary and fiscal policy.

This instructor’s manual complements the textbook Money: Theory and Practice which provides an introduction to modern monetary economics for advanced undergraduates, highlighting the lessons learned from the recent financial crisis. The manual provides teachers with exercises and examples that reflect both the core New Keynesian model and recent advances, taking into account financial frictions, and discusses recent research on an intuitive level based on simple static and two-period models.

Das vorliegende Lehrbuch bietet eine völlig neue Darstellung der Theorie der Geldpolitik, die auf der Anwendung spieltheoretischer Konzepte basiert. Die Spieltheorie hat in den letzten Jahren zu einer realistischeren Sicht politischer Instituionen geführt. Sie liefert die theoretischen Grundlagen zur Analyse zentraler geldpolitischer Fragestellungen: Welche Anreize für inflationäre Prozesse gehen von Stabilisierungspolitik und Staatsverschuldung aus? Welche Bedeutung kommt der Unabhängigkeit von Zentralbanken zu? Das Buch vermittelt die theoretischen Modelle in intuitiver Weise und vertieft sie anhand von aktuellen Beispielen. Ohne anspruchsvolle mathematische Methoden zu verwenden, wird der Leser an die Front der Forschung herangeführt.

Diese Einführung in die Spieltheorie liefert die theoretischen Grundlagen und schult beim Leser die spieltheoretische Argumentationsweise.