The Failure of Financial Macroeconomics and What to Do About It

Datos Bibliográficos

ID19038713
AutoresJean‐Bernard Chatelain (0000-0001-7768-9369, autor de correspondencia), Kirsten Ralf (0000-0002-8030-1035)
Año2012
Volumen80
Números1
Páginas21-53
Fecha de publicación2012-01-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaManchester School (JOURNAL)
Identificadores de la revistaISSN: 1463-6786 • E-ISSN: 1467-9957
EditorialWiley (PUBLISHER • GB)
DOI10.1111/j.1467-9957.2012.02327.x
OpenAlexW1574478650
IdiomaEN
Citas recibidas2
Referencias citadas46

The bargaining power of international banks is currently still very high as compared with what it was at the time of the Bretton Woods conference. As a consequence, systemic financial crises are likely to remain recurrent phenomena with large effects on macroeconomic aggregates. Mainstream macroeconomic models dealing with financial frictions failed to explain at least eight stylized facts of the ongoing crisis. We therefore suggest two complementary assumptions: (i) a systemic bankruptcy risk stable equilibrium may be feasible, and (ii) inefficient financial markets rarely ensure that the price of an asset is equal to its ‘fundamental long‐term value’.

Bankruptcy · Business cycle · Economics · Financial crisis · Financial economics · Macroeconomics · Mainstream · Stylized fact · Banking stability, regulation, efficiency · Economic Theory and Policy · Global Financial Crisis and Policies · Finance