3 Money, credit, and crisis.(Report): An article from: The American Journal of Economics and Sociology
Book Details
Author(s)Mason Gaffney
PublisherBlackwell Publishers Ltd.
ISBN / ASINB0030I6JKY
ISBN-13978B0030I6JK1
AvailabilityAvailable for download now
Sales Rank11,962,806
MarketplaceUnited States 🇺🇸
Description
This digital document is an article from The American Journal of Economics and Sociology, published by Blackwell Publishers Ltd. on October 1, 2009. The length of the article is 21499 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.
From the author: The financial crisis of 2008-2009 has antecedents in earlier crises, including the Great Depression. In order to understand how the current crisis arose, we must review the most fundamental principles of banking. Doing that, we find that the main service performed by banks is the creation of liquidity, a collective good that can be destroyed by the behavior of individual financial institutions. The key element in creating liquidity is the monetization of various types of collateral. When collateral takes the form of land or capital that turns over slowly, banks lose liquidity. That is why major banking crises have frequently been associated with real estate lending. The best way to restore health to the financial system is by restoring the principles of the "real bills" doctrine that requires loans to be self-liquidating.
Citation Details
Title: 3 Money, credit, and crisis.(Report)
Author: Mason Gaffney
Publication:The American Journal of Economics and Sociology (Magazine/Journal)
Date: October 1, 2009
Publisher: Blackwell Publishers Ltd.
Volume: 68 Issue: 4 Page: 983(56)
Article Type: Report
Distributed by Gale, a part of Cengage Learning
From the author: The financial crisis of 2008-2009 has antecedents in earlier crises, including the Great Depression. In order to understand how the current crisis arose, we must review the most fundamental principles of banking. Doing that, we find that the main service performed by banks is the creation of liquidity, a collective good that can be destroyed by the behavior of individual financial institutions. The key element in creating liquidity is the monetization of various types of collateral. When collateral takes the form of land or capital that turns over slowly, banks lose liquidity. That is why major banking crises have frequently been associated with real estate lending. The best way to restore health to the financial system is by restoring the principles of the "real bills" doctrine that requires loans to be self-liquidating.
Citation Details
Title: 3 Money, credit, and crisis.(Report)
Author: Mason Gaffney
Publication:The American Journal of Economics and Sociology (Magazine/Journal)
Date: October 1, 2009
Publisher: Blackwell Publishers Ltd.
Volume: 68 Issue: 4 Page: 983(56)
Article Type: Report
Distributed by Gale, a part of Cengage Learning
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