nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2008‒03‒15
two papers chosen by
Karl Petrick
University of the West Indies

  1. Endogenous Money in the Age of Financial Liberalization By Gökçer Özgür; Korkut A. Ertürk
  2. Better Than Conscious? The Brain, the Psyche, Behavior, and Institutions By Christoph Engel; Wolf Singer

  1. By: Gökçer Özgür; Korkut A. Ertürk
    Abstract: The paper reports results that show a much weakened statistical relationship between total bank credit, total deposits and the broad money supply for the period after 1995 for the US, where no statistical causation can be discerned in either direction. This has been the result of the changing nature of the credit creation process where banks have acquired almost total independence from required reserves and core deposits in extending credit, and even an ability to circumvent the constraint posed by capital requirements through asset securitization, giving rise to an explosive increase in nonbank intermediation. As a result, the expansion of bank credit did not result in a commensurate increase of bank deposits because financial intermediation spilled over to nondepository institutions, and with the growing importance of nonbank deposits in M3, broad money supply became broader than banks’ total deposits.
    Keywords: Endogenous Supply of Money, Broad Money, Financial Intermediation, Asset Securitization
    JEL: B22 E12 E51
    Date: 2008–06
  2. By: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Wolf Singer (Max Planck Institute for Brain Research, Frankfurt/Main)
    Abstract: The title of this chapter is deliberately provocative. Intuitively, many will be inclined to see conscious control of mental process as a good thing. Yet control comes at a high price. The consciously not directly controlled, automatic, parallel processing of information is not only much faster, it also handles much more information, and it does so in a qualitatively different manner. This different mental machinery is not adequate for all tasks. The human ability to consciously deliberate has evolved for good reason. But on many more tasks than one might think at first sight, intuitive decision-making, or at least an intuitive component in a more complex mental process, does indeed improve performance. This chapter presents the issue, offers concepts to understand it, discusses the effects in terms of problem solving capacity, contrasts norms for saying when this is a good thing, and points to scientific and real world audiences for this work.
    JEL: C70 C91 D01 D81 K41
    Date: 2007–12

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