Title: The fundamental role of money and banking in macroeconomic analysis and policymaking

Authors: Sergio Rossi

Addresses: Macroeconomics and Monetary Economics, Department of Economics, University of Fribourg, Boulevard de Pérolles 90, CH-1700 Fribourg, Switzerland

Abstract: The crisis that burst in 2007 has revealed a number of conceptual and methodological flaws of neoclassical economic analysis, based on rational behaviour, representative agents, and microfounded macroeconomics, where money and banking are considered as pertaining to the microeconomics of goods and business activities. Macroeconomic analysis requires a systemic approach to money and banking, both of which are essential for the working of any economic system. In this perspective, the paper explains how both have to be integrated into that analysis. It points out that macroeconomic analysis and policy making require a deep knowledge of the history of monetary thinking.

Keywords: macroeconomics; methodology; money; banking; monetary circuit; economic crisis; financial crisis; neoclassical economics.

DOI: 10.1504/IJPEE.2012.051140

International Journal of Pluralism and Economics Education, 2012 Vol.3 No.3, pp.308 - 319

Published online: 16 Aug 2014 *

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