The Monetary Circuit in the Age of Financialisation: A Stock‐Flow Consistent Model with a Twofold Banking Sector

33 Pages Posted: 5 Apr 2017

Date Written: May 2017

Abstract

The paper explores how the Theory of Monetary Circuit can be developed to reflect some important features of the evolution of the financial system in the past three decades, which have been associated with what may be termed ‘financialisation.’ For this purpose, we embed the benchmark single‐period monetary circuit scheme proposed by Graziani in a richer set of institutional arrangements. The stock‐flow consistent modelling technique pioneered by Godley and Lavoie is used to support our narrative.

Suggested Citation

Sawyer, Malcolm C. and Veronese Passarella, Marco, The Monetary Circuit in the Age of Financialisation: A Stock‐Flow Consistent Model with a Twofold Banking Sector (May 2017). Metroeconomica, Vol. 68, Issue 2, pp. 321-353, 2017, Available at SSRN: https://ssrn.com/abstract=2945771 or http://dx.doi.org/10.1111/meca.12103

Malcolm C. Sawyer (Contact Author)

Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States
845-758-7700 (Phone)
845-758-1149 (Fax)

Marco Veronese Passarella

University of Leeds ( email )

Leeds, LS2 9JT
United Kingdom

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