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Finance and Macroeconomics

  • Alessandro VercelliEmail author
Chapter

Abstract

The relationship between finance and macroeconomics has far-reaching analytical and policy implications but has been rarely analysed in general terms. In the period following WWII, the relationship between the evolution of Modern Financial Economics and Macroeconomics has been complex. Leading Keynesian macroeconomists (such as Samuelson, Modigliani, and Tobin) actively promoted in the 1950s and 1960s the emergence and early development of Modern Financial Economics, while in the 1970s and 1980s the latter contributed to the anti-Keynesian revolution led by New Classical Economics. Within mainstream economics, a constructive cross-fertilisation started to develop between Financial Economics and the new version of mainstream Keynesianism: New Keynesian Economics. However, the influence of finance remained largely restricted to the methodological point of view rather than to its contents and policy implications. The concluding remarks argue that the relationship between finance and macroeconomics is an open issue that should be investigated in more depth to provide the necessary orientation and support to a sustainable policy and regulation strategy.

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© The Author(s) 2019

Authors and Affiliations

  1. 1.University of SienaSienaItaly

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