Monetary Policy, the Stock Market and the Real Economy: A Keynesian Conspectus
Pieces of theory, quite completely described below, are arranged so that the emergent structure is quite strictly Keynesian. Thus we concentrate on changes in interest rates cum the unsatisfied fringe of borrowers as transmitters of central-banking actions. Indeed, real balance effects are eschewed; we tacitly adopt my earlier Burden of the Money Supply argument concerning the essentially zero-sum implications for net real wealth of purely financial assets, whether from a global or microeconomic standpoint.1
KeywordsInterest Rate Monetary Policy Real Economy Nominal Interest Rate Inflationary Expectation
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