The Theory of Money and Financial Institutions, Volume 3
The third and last volume of a work aimed at providing the theoretical underpinnings for an economic dynamics.
This is the third and last volume of Martin Shubik's exposition of his vision of “mathematical institutional economics”—a term he coined in 1959 to describe the theoretical underpinnings needed for the construction of an economic dynamics. The goal is to develop a process-oriented theory of money and financial institutions that reconciles micro- and macroeconomics, using strategic market games and other game-theoretic methods.
There is as yet no general dynamic counterpart to the elegant and mathematically well-developed static theory of general equilibrium. Shubik's paradigm serves as an intermediate step between general equilibrium and full dynamics. General equilibrium provides valuable insights on relationships in a closed, friction-free economic structure. Shubik aims to open up this limited structure to the rich environment of sociopolitical economy without dispensing with conceptual continuity.
Volume 3 considers the specific roles of financial institutions and government, aiming to provide the link between the abstract study of invariant economic and financial functions and the ever-changing institutions that provide these functions. The concept of minimal financial institutions is stressed as a means to connect function with form in a parsimonious manner.
Hardcover$12.75 S | £10.99 ISBN: 9780262013208 680 pp. | 6 in x 9 in 22 figures, 64 tables
Paperback$6.75 S | £5.99 ISBN: 9780262518031 680 pp. | 6 in x 9 in 22 figures, 64 tables
As Martin Shubik has often noted, modern economics exists in an institutional vacuum. In this fascinating and elegant book, Shubik provides a bridge between the institutionally barren theory of general equilibrium and a richer strategic approach combining a game-theoretic view rich in institutional details. The book is a tour de force in political economy and recommended for anyone who is searching for a micro-based theory of macro and monetary phenomena.
Professor of Economics and Director of the Center for Experimental Social Science, New York University
Martin Shubik is co-inventor of the 'market game': the best general equilibrium model of imperfect competition, the obvious link between GE theory and game theory, and a useful platform for evaluating the roles of money, credit, and banking. This is the third in an ambitious series of books on a very timely subject. Like the others, this one is marked by Shubik's deep insights derived from market games, combined with his broad understanding of economic theory and institutions.
Thorne Professor of Economics, Cornell University