Goodhart, Charles A. E.; Tsomocos, Dimitrios P. - In: Monetary and Economic Studies 29 (2011) November, pp. 49-72
What is the main limitation of much modern macroeconomic theory, among the failings pointed out by William R. White at the 2010 Mayekawa Lecture? We argue that the main deficiency is a failure to incorporate the possibility of default, including that of banks, into the core of the analysis. With...