Credit Money, Collateral and the Solvency of Banks: A Post Keynesian Analysis of Credit Market Failures
The discussion on endogenous money has led to a rich understanding of banking. The determination of creditworthiness though remains a black box in Post Keynesian economics. After a critique of the New Keynesian banking literature this paper argues that creditworthiness to a large extent is endogenous to the monetary economy and the credit system. It is argued that a solvency multiplier exists that affects the willingness of banks to grant credit. The multiplier works via the valuation of collateral goods. It can accelerate the growth but also the contraction of credit and explains both endogenous financial crises and credit rationing.
Year of publication: |
2011
|
---|---|
Authors: | Ramskogler, Paul |
Published in: |
Review of Political Economy. - Taylor & Francis Journals, ISSN 0953-8259. - Vol. 23.2011, 1, p. 69-79
|
Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Trade in value added: Do we need new measures of competitiveness?
Lommatzsch, Kirsten, (2016)
-
Trade in value added: do we need new measures of competitiveness?
Lommatzsch, Kirsten, (2016)
-
Post-Keynesian economics How to move forward
Stockhammer, Engelbert, (2009)
- More ...