Credit, Investments and the Macroeconomy

Includes innovative attempts to investigate the causal links among macroeconomic models, institutional phenomena and industrial structure.

This book relates the literatures of finance, industrial economics and investment to the theoretical framework of the 'credit view'. The view that banks' lending is very relevant for the transmission of monetary economics is related to the economic analysis of institutions, investment theory and finance.This book relates the literatures of finance, industrial economics and investment to the theoretical framework of the 'credit view'. Firstly it is assumed that banks' decisions concerning their assets are seen as at least as relevant as their decisions concerning their liabilities. Secondly, securities and bank credit are considered to be highly imperfect substitutes. In this regard it is important to investigate the way industrial and financial sectors interact. In particular, how is the macroeconomy affected by the phenomenon of 'securitization' and by exogenous changes in the industrial structure of the credit market. The interactions between real and financial sectors are also analysed from the point of view of the industrial firm, in a model where the investment and financial decisions of the firm are taken simultaneously.