John Maynard Keynes' response to the extreme distress of the early years of the Great Depression produced The General Theory, which represented an overhaul of the macroeconomics inherited by his generation. The economic upheaval (including the Great Recession) since 2008 raised serious doubts about the relevance of economics as it had come to be formulated and taught by the beginning of this century. While numerous books and articles have addressed the current distress of economies through contributions to specific parts of macroeconomics, none has offered an attractive alternative that represents a general overhaul of the macroeconomics inherited by the current generation. A Reformulation of Keynesian Economic does so, and provides a modern integrated version of macroeconomics for the modern economies as they function.This book's many insights and innovations include: discarding the classical concepts of the long run and the short run in favour of the behavioural concepts of the planning period (the long term) and the short term (the operating period); discarding the exogenous production function in favour of an endogenous one; distinguishing between the short-term and the long-term production functions; replacing the dynamic stochastic notional general equilibrium (DSGE) approach for the short term by a more general one that permits effective equilibrium and disequilibrium in specific markets; and, a reformulation of the financial sector analysis and of the Keynesian business cycle theory.This thoroughgoing revision of macroeconomics is must-read for macroeconomists, policymakers and graduate students. It can even be used as a textbook by instructors who question the inherited orthodoxy built around the DSGE model and are looking for an alternative formulation of macroeconomics.

This book includes three economic/econometric studies on four East Asian countries (Indonesia, Malaysia, Philippines and Thailand) and two studies on China. The four East Asian economies, designated at one time as 'economic tigers', provide important and interesting case studies on periods of very rapid growth with heavy capital inflows, followed by financial and economic crises. The three studies on these countries examine the impact of heavy capital inflows on growth, real exchange rates and the conduct of domestic monetary policy during the period 1970-96, which immediately preceded their financial crises of 1997-98. At a more general level, they shed light on the contributions that capital inflows make to small open economies and how these inflows have impact on their exchange rate and monetary policies. The two studies on China examine the adequacy of capital flows to it and its monetary policies. In recent years, while China has been among the biggest recipients of capital inflows, our study on it finds that these inflows are still considerably short of the amounts that perfect capital flows would imply. Regarding China's pursuit of monetary policy, our study is the first one to question whether interest rates or monetary aggregates are appropriate instruments for the control of the economy. Our finding is that its large informal sector and black money holdings make the use of monetary aggregates the more appropriate policy instrument. This finding contrasts with the usual one for financially developed economies that interest rate targeting and a Taylor rule provide the applicable monetary policy framework.

This textbook seeks to break new ground in developing an integrated and comprehensive overview of advanced monetary economics. It achieves this by integrating the presentation of monetary theory with its heritage, empirical formulations and their empirical tests. Rather than confine the coverage to the demand and supply of money, or to macroeconomic and monetary policy, the book brings together the core areas of monetary economics in a single source.;Key features include: cross-country comparison of central banking in the USA, UK and Canada as well as in developing countries; theories and empirical studies of money demand, including precautionary and buffer stock models and monetary aggregation; detailed comparison of Keynesian and modern classical macroeconomic theory and policy models; focus on the role of money and financial institutions and growth, including the contribution of endogenous growth theory to the understanding of financial institutions in the economy. Students may in particular welcome the close integration between theories and their empirical studies.; Requiring only a grounding in the principles of economics, this text is comprehensive enough to be used on a two t

This successful text, now in its second edition, offers the most comprehensive overview of monetary economics and monetary policy currently available. It covers the microeconomic, macroeconomic and monetary policy components of the field. Major features of the new edition include: Stylised facts on money demand and supply, and the relationships between monetary policy, inflation, output and unemployment in the economy. Theories on money demand and supply, including precautionary and buffer stock models, and monetary aggregation. Cross-country comparison of central banking and monetary policy in the US, UK and Canada, as well as consideration of the special features of developing countries. Monetary growth theory and the distinct roles of money and financial institutions in economic growth in promoting endogenous growth. This book will be of interest to teachers and students of monetary economics, money and banking, macroeconomics and monetary policy.

This successful text, now in its second edition, offers the most comprehensive overview of monetary economics and monetary policy currently available. It covers the microeconomic, macroeconomic and monetary policy components of the field. Major features of the new edition include: Stylised facts on money demand and supply, and the relationships between monetary policy, inflation, output and unemployment in the economy. Theories on money demand and supply, including precautionary and buffer stock models, and monetary aggregation. Cross-country comparison of central banking and monetary policy in the US, UK and Canada, as well as consideration of the special features of developing countries. Monetary growth theory and the distinct roles of money and financial institutions in economic growth in promoting endogenous growth. This book will be of interest to teachers and students of monetary economics, money and banking, macroeconomics and monetary policy.

Contents:
Part I: Introduction and Heritage 1. Introduction 2. The Analysis of Money and Prices: The Heritage Part II: Money in the Economy 3. Money in the Economy: General Equilibrium Analysis Part III: The Demand for Money 4. The Transactions Demand for Money 5. Portfolio Selection and the Speculative Demand for Money 6. Precautionary and Buffer Stock Demand for Money 7. The Estimating Function for the Demand of Money 8. Monetary Aggregation 9. The Demand Function for Money: Empirical Findings Part IV: Money Supply and Central Banking 10. The Money Supply Process 11. The Central Bank: Goals, Tools and Guides for Monetary Policy 12. The Central Bank: Targets, Conflicts, Independence and the Time Consistency of Policies Part V: Money in the Macroeconomy 13. The Classical Paradigm in Macroeconomics: Neoclassical and Classical Models 14. The Keynesian and Neokeynesian Approaches to Short Run Macroeconomics 15. Expectations in Macroeconomics and Monetary Policy 16. Macro Models, Policy Rules and Perspectives on the Neutrality of Money 17. Walras' Law and the Interaction Among Markets Part VI: Money in the Open Economy 18. The Open Economy: Exchange Rates and the Balance of Payments 19. The Macroeconomic Model for the Open Economy Part VII: The Rates of Interest in the Economy 20. The Macroeconomic Theory of the Rate of Interest 21. The Structure of Interest Rates Part VIII: Overlapping Generations Models of Money 22. The Overlapping Generations Model of Fiat Money 23. The OLG Model: Seigniorage, Bonds and the Neutrality of Fiat Money 24. The Olg Model of Money: Making it More Realistic Part IX: Money and Financial Institutions in Growth Economy 25. Neoclassical Growth Theory Without Money 26. Monetary Growth Theory