The quest for monetary and financial stability: a review of professor Dilip M. Nachane,critique of the new consensus macroeconomics and implications for India

We review Professor Nachane’s book on New Consensus Macroeconomics. The Review argues that such a consensus is possible not at theoretical level, but at policy level, clarifies the link of Keynes’s General Theory to his Treatise, introduced in the book, brings out contributions of Wicksell, Clower, and Schumpeter, missed out in the book, and evaluates the discussion of issues in central banking/financial sector reforms. The book emphasizes monetary/financial stability. We recommend applying a proposal for regulatory veto to securitized bundles of loans issued by different lenders. These represent business or gambling bets rather than theoretically possible aggregation of risks.