Monetary Policy, Financial Crises, and the Macroeconomy

1. Front Matter

   Pages i-viii

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2. Monetary Policy, Financial Crises, and the Macroeconomy: Introduction

   • Frank Heinemann, Ulrich Klüh, Sebastian Watzka

   Pages 1-16

3. Liquidity From a Macroeconomic Perspective

   1. Front Matter

      Pages 17-17

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   2. Balancing Lender of Last Resort Assistance with Avoidance of Moral Hazard

      • Charles Goodhart

      Pages 19-26

   3. Optimal Lender of Last Resort Policy in Different Financial Systems

      • Falko Fecht, Marcel Tyrell

      Pages 27-57

   4. Network Effects and Systemic Risk in the Banking Sector

      • Thomas Lux

      Pages 59-78

   5. Contagion Risk During the Euro Area Sovereign Debt Crisis: Greece, Convertibility Risk, and the ECB as Lender of Last Resort

      • Sebastian Watzka

      Pages 79-104

   6. The Case for the Separation of Money and Credit

      • Romain Baeriswyl

      Pages 105-121

4. Putting Theory to Work: Macro-Financial Economics from a Policy Perspective

   1. Front Matter

      Pages 123-123

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   2. (Monetary) Policy Options for the Euro Area: A Compendium to the Crisis

      • Sascha Bützer

      Pages 125-162

   3. On Inflation Targeting and Foreign Exchange Interventions in a Dual Currency Economy

      • Ivana Rajković, Branko Urošević

      Pages 163-176

   4. Macroprudential Analysis and Policy: Interactions and Operationalisation

      • Katri Mikkonen

      Pages 177-200

   5. Are Through-the-Cycle Credit Risk Models a Beneficial Macro-Prudential Policy Tool?

      • Manuel Mayer, Stephan Sauer

      Pages 201-224

   6. Assessing Recent House Price Developments in Germany: An Overview

      • Florian Kajuth

      Pages 225-235

5. Re-Conceptualizing Macroeconomics: An Interdisciplinary Perspective

   1. Front Matter

      Pages 237-237

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   2. German Unification: Macroeconomic Consequences for the Country

      • Axel Lindner

      Pages 239-263

   3. Approaches to Solving the Eurozone Sovereign Debt Default Problem

      • Ray Rees, Nadjeschda Arnold

      Pages 265-295

   4. Appraising Sticky Prices, Sticky Information and Limited Higher Order Beliefs in Light of Experimental Data

      • Camille Cornand

      Pages 297-306

   5. Rising Income Inequality: An Incentive Contract Explanation

      • Dominique Demougin

      Pages 307-323

   6. No More Cakes and Ale: Banks and Banking Regulation in the Post-Bretton Woods Macro-regime

      • Moritz Hütten, Ulrich Klüh

      Pages 325-349

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.

• Bank Regulation
• Financial Crises
• Liquidity Risk
• Macroeconomics
• Monetary Policy
• banking

• Chair of Macroeconomics, Technische Universität Berlin, Berlin, Germany

  Frank Heinemann

• Darmstadt Business School, Hochschule Darmstadt, Darmstadt, Germany

  Ulrich Klüh

• IMK - Macroeconomic Policy Institute, Hans-Böckler-Foundation, Düsseldorf, Germany

  Sebastian Watzka

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.

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