(Edited with Donald D. Hester) This monograph is one of three (Monographs 19, 20, and 21) that bring together nineteen essays on theoretical and empirical monetary economics written by recent Yale graduate students and staff members of the Cowles Foundation. Seven of these are based on doctoral dissertations approved by the Yale Economics Department, supervised by Cowles Foundation staff members and other members of the Department.
The subjects of Monograph 21, Financial Markets and Economic Activity, are macroeconomic. They concern the conditions of equilibrium in economy-wide financial markets. The microeconomic principles discussed in the first two monographs are assumed to guide the behavior of individual economic units, including financial intermediaries, in demanding and supplying assets and debts in these markets. But the main focus is on the adjustment of interest rates and other yields to create equilibrium in various financial markets simultaneously. From this standpoint, the quantity of money as conventionally defined is not an autonomous variable controlled by governmental authority but an endogenous or “inside” quantity reflecting the economic behavior of banks and other private economic units. Commercial banks are seen to differ from other financial intermediaries less basically in the nature of their liabilities than in the controls over reserves and interest rates to which they are legally subject. Models of financial market equilibrium can be used to analyze a wide variety of questions about the behavior of financial markets. The theoretical studies in Monograph 21 apply this framework to investigate the consequences of various institutions and regulations for the effectiveness of monetary control. In addition some empirical findings on the structure of interest rates by maturity and by risk category are reported.
(Edited with Donald D. Hester) This monograph is one of three (Monographs 19, 20, and 21) that bring together nineteen essays on theoretical and empirical monetary economics written by recent Yale graduate students and staff members of the Cowles Foundation. Seven of these are based on doctoral dissertations approved by the Yale Economics Department, supervised by Cowles Foundation staff members and other members of the Department.
The seven essays in Monograph 19, Risk Aversion and Portfolio Choice, have both normative implications. as pieces of advice to investors, and positive implications, as descriptions of the economy They are partly theoretical and partly empirical, They concern, on the one hand, the attitudes of investors toward risk and average return and, on the other, the opportunities which the market and the tax laws afford investors for purchasing less risk at the expense of expected return.
(Edited with Donald D. Hester) This monograph is one of three (Monographs 19, 20, and 21) that bring together nineteen essays on theoretical and empirical monetary economics written by recent Yale graduate students and staff members of the Cowles Foundation. Seven of these are based on doctoral dissertations approved by the Yale Economics Department, supervised by Cowles Foundation staff members and other members of the Department.
Monograph 20, Studies of Portfolio Behavior, is institutionally oriented. The six essays draw on the theoretical developments mentioned above and seek to apply them to the particular circumstances and objectives of various kinds of economic units: households, nonfinancial corporations, banks, and life insurance companies. It is our hope that the analytical tools contribute to the interpretation of the statistical data available on balance sheets and capital accounts.