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This volume investigates different aspects of monetary policy and prevention of financial crises. It discusses some recently suggested measures for central banks' responses to liquidity shortages and to the liquidity trap, methods for assessing the potential of crisis contagion via the interbank network, and the interaction between micro- and macro-prudential regulation. It compares different approaches for solving the Eurozone sovereign-debt problem and provides a new and intriguing explanation for rising income inequality. The authors are experts on monetary policy, financial crises, and contract theory from different European universities and central banks.
List of contents
Introduction.- Part I Liquidity From a Macroeconomic Perspective.- Balancing Lender of Last Resort Assistance with Avoidance of Moral Hazard.- Network Effects and Systemic Risk in the Banking Sector.- Optimal Central Bank Policy in Different Financial Systems.- Contagion Risk during the Euro Area Sovereign Debt Crisis: Greece, Convertibility Risk, and the ECB as Lender of Last Resort.- The Case for the Separation of Money and Credit.- Part II Putting Theory to Work: Macro-Financial Economics from a Policy Perspective.- (Monetary) Policy Options for the Euro Area: A Compendium to the Crisis.- On Inflation Targeting and Foreign Exchange Interventions in a Dual Currency Economy.- Macroprudential Analysis and Policy - Interactions and Operationalization.- Are Through-the-Cycle Credit Risk Models a Beneficial Macro-Prudential Policy Tool?.- Assessing Recent House Price Developments in Germany - An Overview.- Part III Re-Conceptualizing Macroeconomics: An Interdisciplinary Perspective.- German Unification: Macroeconomic Consequences for the Country.- Approaches to Solving the Eurozone Sovereign Default Problem.- Appraising Sticky Prices, Sticky Information, and Limited Higher-Order Beliefs in Light of Experimental Data.- Rising Income Inequality: An Incentive Contract Explanation.- No More Cakes and Ale: Banks and Banking Regulation in the Post-Bretton-Woods Macro-Regime.- Letter to Gerhard Illing.
About the author
Frank Heinemann is professor of macroeconomics at the Berlin University of Technology. His main research interests are monetary macroeconomics, financial crises, and experimental economics.
Ulrich Klüh is professor of economics at Hochschule Darmstadt. His main research interests are macroeconomic theory and policy, central banking, financial markets and institutions, and history and theory of economic thought.
Sebastian Watzka is assistant professor at the Seminar for Macroeconomics of the University of Munich, LMU. His research interests are monetary policy and financial markets, financial crises, inequality and unemployment.
Summary
This volume investigates different aspects of monetary policy and prevention of financial crises. It discusses some recently suggested measures for central banks' responses to liquidity shortages and to the liquidity trap, methods for assessing the potential of crisis contagion via the interbank network, and the interaction between micro- and macro-prudential regulation. It compares different approaches for solving the Eurozone sovereign-debt problem and provides a new and intriguing explanation for rising income inequality. The authors are experts on monetary policy, financial crises, and contract theory from different European universities and central banks.
