Money and banking in a mature Walrasian economy |
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Authors: | Alexander Garvin |
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Institution: | (1) Indiana University of Pennsylvania, USA |
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Abstract: | All financial transactions in the original Walrasian economy, as written in the édition définitive of the éléments, occur
in the markets for short-term money services (the short-term bond market) and commodity E (the equity market). However, introduction
of the long-term bond and the deposit markets requires only minor surgery to the original and they are now supplied, inspiring
the name mature Walrasian economy. Transactions in numeraire then entail all institutions of the banking system and provide
completely for money and credit. Into this economy the condition of inconvertibility, a discretionary numeraire with reserve
requirements, and a central bank are introduced and clarified. Finally, multiple monetary subsystems in the same global economy
are recognized and reconciled, thus establishing a global economy with a single numeraire commodity. |
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Keywords: | |
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