Money Capital: New Monetary Principles for a More Prosperous Society

Cover
Contents
List of Illustrations and Tables
Preface
1. The Poverty of Monetarism
	1. Monetarism as Formulated by Friedman and Schwartz
	2. Minsky’s Critique
	3. Some Macroeconomic Puzzles
	4. Enriching the Monetarist Framework
		4.1 Money Is Equity
		4.2 Money Is Sovereignty
		4.3 Money Is Central Banking
	5. Concluding Remarks
2. The Capital Structure of Nations
	1. A Simple, Open Monetary Economy
	2. The Modigliani-Miller Theorem for Nations
	3. Optimal Capital Structure for Nations
		3.1 Money Financing and Inflation Costs
		3.2 Debt Financing and the Cost of Default
		3.3 Debt Versus Equity Financing
	4. Debt Overhang
	5. Foreign-Exchange Reserve Management
	6. Model Predictions and Empirical Observations
	7. Summary
3. Money, Banking, and the Lender of Last Resort
	1. A Closed Monetary Economy Framework
		1.1 Firms, Banks, and Inside Money
	2. No Aggregate Uncertainty
		2.1 Equilibrium with Scarce Investment Opportunities
		2.2 Equilibrium with Scarce Money
	3. Aggregate Uncertainty and the Bagehot Rule
	4. Aggregate Uncertainty and the Draghi Rule
	5. Moral Hazard
	6. Conclusion
	Appendix
4. How Did China Finance Its Growth?
	1. The Extraordinary Economic Development of China
	2. Capital Investment in China’s Growth Process
	3. The Challenge of Raising Capital in Developing Countries
	4. The Problems of Centralized Credit Allocation
	5. Transformation of the Central Bank
	6. Credit Creation and the Transformation of the Banking System
	7. China Development Bank and Development Finance
	8. The Evolving Capital Market Reform and Development
	9. The Puzzle of China’s High Monetary Growth and Low Inflation
5. The Coordination of Fiscal and Monetary Policy
	1. Money and Sovereign Debt
	2. The Institutional and Informational Frictions Affecting Fiscal and Monetary Policy
		2.1 Institutional and Informational Frictions
		2.2 The Functions of Monetary Policy
		2.3 The Functions of Fiscal Policy
	3. The Coordination of Monetary and Fiscal Policies
	4. Policy Dominance and How to Break It
	5. Case Study of the United States
		5.1 Before the Great Depression (Pre-1929)
		5.2 The Great Depression (1929–1933)
		5.3 World War II (1942–1945)
		5.4 Stagflation (1970–1981)
		5.5 Global Financial Crisis (2007–2009)
		5.6 The COVID-19 Pandemic (2020–2021)
	6. Case Study of China
		6.1 The Birth of the Centrally Planned Economy (1952–1978)
		6.2 Early Years of Reform and Opening Up (1978–1994)
		6.3 Asian Financial Crisis (1997)
		6.4 Global Financial Crisis (2008)
		6.5 Deleveraging and U.S.-China Trade Disputes (2018–2019)
	7. A Simple Rule for Fiscal-Monetary-Financial Policy Coordination
	8. Concluding Remarks
6. Money and Sovereignty
	1. Introduction
	2. A Model with Two Countries
	3. The Special Case of One Country
	4. Two Countries
		4.1 Equilibrium with Perfect Foreign-Exchange Markets
		4.2 Equilibrium with Imperfect Foreign-Exchange Markets
	5. Monetary Union
		5.1 Welfare under a Monetary Union
		5.2 When is a Monetary Union Preferable?
	6. Debt Monetization and Fiscal Transfers in a Monetary Union
	7. Historical Perspective
		7.1 The Protracted Struggle toward U.S. Monetary Unification
		7.2 Collapse of the Gold Standard and Competitive Devaluations
		7.3 The Bretton Woods System and the Return of a Quasi-gold Standard
		7.4 The International Monetary System after the Collapse of Bretton Woods
		7.5 The Advent of the Euro
		7.6 Currency Boards and Other Forms of Monetary Union
		7.7 Recent Developments in the International Monetary System
		7.8 Digital Currencies and Sovereignty
	8. Conclusion
7. Taking Stock
Acknowledgments
References
Index