Towards a New Paradigm for Monetary Economics
TOWARDS A NEW PARADIGM FOR MONETARY ECONOMICS Bruce Greenwald and Joseph E. Stiglitz1 1 These lectures are based on our joint research over the past decade, parts of which are reported in Greenwald (1998), Greenwald and Stiglitz (1987a, 1987b, 1987c, 1988a, 1988b, 1988c, 1988d, 1989a, 1989b, 1990a, 1990b, 1991a, 1991b, 1991c, 1991d, 1992, 1993a, 1993b, 1993c, 1995); Greenwald, Kohn, and Stiglitz (1990); Greenwald, Levinson, and Stiglitz (1991); Greenwald, Salinger and Stiglitz (1991); Greenwald, Stiglitz, and Weiss (1984);and Clay, Greenwald, and Stiglitz (1990). In parts of these lectures, we have also drawn upon joint work with Thomas Hellmann and Kevin Murdoch (especially in the discussions concerning bank regulation) reported in Hellmann, Murdoch, and Stiglitz (1999 ) and in Hellman and Stiglitz ( 2000). The analysis of East Asia crisis in Part Two draws heavily upon join work of Stiglitz and Jason Furman (Fuman and Stiglitz (1998)). We are deeply indebted to all of these co-authors and the ideas articulated here are as much theirs as they are ours. We also wish to acknowledge the assistance of Noémi Giszpenc, Nadia Roumani, and Maya Tudor in preparing these lectures. The views expressed here are solely those of the authors and do not necessarily represent those of any organization with which they are or have been affiliated. PART ONE ..................................................................................................................................... 3 CHAPTER I. REFLECTIONS ON THE CURRENT STATE OF MON. ECONOMICS ..........
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