Davidson Paul. Financial Markets, Money and the Real World

Edward Elgar Publishing Limited, 2002. — 276 p.List of figures and tables.
Keynes, you should be alive today!
Postwar economic performance.
Keynes’s revolution.
The academic resurrection of classical economics.
Differing views on the role of financial markets.
Five key points.
Keynes, the poet of money.
A brief outline of this monograph.
Keynes’s principle of effective demand.
Is lack of competition the fundamental cause of.
unemployment? Liquidity versus Say’s Law.
Say’s Law.
Classification and the principle of effective demand.
Why flexible wages do not assure full employment.
Some further clarifications.
A simple illustration of the principle of.
effective demand.
Deriving Keynes’s aggregate supply and demand analysis from Marshallian micro demand and supply functions.
Uncertainty and reality in economic models.
A parable: the fable of the P’s, or what mortals these P’s fool!
Axioms and model building.
Classical axioms and money’s elasticity properties.
Two concepts of economic reality.
A brief excursion into the history of economic thought.
Uncertainty and ergodic stochastic processes.
Immutable versus transmutable theories of reality.
Uncertainty and ‘irrational’ behavior.
Crucial decisions and Schumpeterian entrepreneurs.
Appendix 3A Are probabilities knowable but unknown.
because of limited human computing power?
Investment: illiquid real capital versus liquid assets.
Two types of investment.
Markets, contracts, liquidity and chartalist money.
Financing and funding assets: why money matters.
Asset position taking and liquidity.
Real capital, savings, time preference and liquidity preference.
Attributes of all durables.
Why liquidity preference? 87.
The four motives for holding money.
The demand for the medium of contractual settlement.
The demand for a liquid time machine.
Bulls versus bears.
The finance motive and endogenous money.
The finance motive, finance and funding.
Endogenous versus exogenous money.
Financial markets, liquidity and fast exits.
The double-edged sword of financial markets.
Market liquidity, fast exits and funding investments.
The market for securities.
The different role of banks and nonbank financial intermediaries.
Bank loans and money-market financial intermediaries.Planned investment, planned savings, liquidity and economic growth.
Harrod’s actual, warranted and natural rates of growth.
Planned savings and the supply of financial assets.
Ownership and liquidity.
External funding and savers’ ‘nonspeculative’ demand for securities.
Actual growth when new issues exceed the nonspeculative demand for securities.
The contractionary case with a bull market.
Economic growth, liquidity and funding ‘other’ spending sectors.
Some conclusions.
Complicating the picture: money and international liquidity.
Open versus closed and unionized versus nonunionized monetary systems.
Aggregate accounting as a basis for the closed–open dichotomy.
The accounting value of exports and imports and transfer pricing.
The balance of payments accounting statement.
Measuring the degree of openness.
The UMS–NUMS classification.
Exchange uncertainty.
Was the gold standard a UMS?
Trade imbalances and international payments.
Classical real adjustment processes.
Trade adjustments, payments adjustments and the Marshall–Lerner condition.
Income effects and payments imbalances.
Thirlwall’s Law: extending Harrod’s trade multiplier analysis.
The demand for money – domestic or international.
The need for reserves.
International liquidity and exchange rate stability.
The facts versus the theory of flexible exchange rates.
Fixed versus flexible exchange rates and asset holdings.
The efficient market hypothesis again.
Who should ‘make’ the exchange rate market?
If markets are efficient why has there been so much volatility in financial markets?
Efficiency versus liquidity.
Taxing volatility: theory versus the facts.
Ergodicity, efficient markets and noise traders.
Summers, Tobin and super-efficient markets.
Keynes, speculation and liquid financial markets.
Keynes, liquid financial markets and the empirical findings.
Ergodicity, efficient markets and the empirical findings.
Are real capital allocation decisions efficient?
Speculative whirlpools and bandwagons.
A policy implication: buffering conventional wisdom.
Exchange rates and the Tobin tax 200.
Is social control of exchange markets bad?
Capital uncertainty, speculative flows and the Tobin tax.
The plumbers’ solution to destabilizing international capital flows.
Capital movements.
Flexible exchange rates and export-led growth.
Explaining the facts.
A lesson from the gold standard era.
Plumbing solutions to end financial market volatility.
The Bretton Woods experience and the Marshall Plan.
The architectural solution: reforming the world’s money.
Reforming the international payments system.
Alternative financial architectural proposals.
Criticism of Williamson’s FEER proposal.
Criticism of McKinnon’s PPP proposal.
A comparison of the three architectural proposals.
What if?The economy and the twenty-first century.
The positive role of government.