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The Theory of the Banking System

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Abstract

Since this theory of the Banking System should be a part of a dynamic general disequilibrium system we shall not model a specific banking system but try to present a system which is a simplified version of many realized banking systems. The basic idea is the same as in the theory of the household and the theory of the firm: everything what we observe and what is not due to nature is the result of human decisions which may be explained by the evaluation of a certain number of alternatives. In our case there are the directors of commercial banks and of the Central Bank who (in connection with the brokers at the exchanges) determine the financial conditions which the firms and households have to accept. The theory is similar to the theory of the firm, but not identical.

Keywords

  • Interest Rate
  • Monetary Policy
  • Discount Rate
  • Decision Variable
  • Capital Stock

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Krelle, W.E. (2003). The Theory of the Banking System. In: Economics and Ethics 1. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-24733-3_3

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  • DOI: https://doi.org/10.1007/978-3-540-24733-3_3

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-53434-8

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