Money, credit and the macroeconomy
IIPP will explore how the state can influence the financial sector and steer public investment to support sustainable economic growth and create public value.
About
The financial crisis of 2008 raised fundamental questions about fiscal-, monetary- and financial policy. It became clear that the banking system in advanced economies is no longer primarily supporting the real economy but rather turning towards speculative investment. IIPP’s research in this area focusses how key public sector agencies - central banks, ministries of finance, financial regulators and supervisors – can influence financial flows and steer public investment to support sustainable economic growth and industrial policy objectives whilst maintaining financial stability. The years following the crisis also demonstrated a need to rethink fiscal policy as austerity led to stagnation and rising debts relative to incomes. Here our research focusses on the way in which different types of public investment and spending can support innovation and structural change to meet the grand challenges facing modern economies.
Policy implications
Our research in this field pushes back against the conventional macroeconomic view that in the long run finance and money are ‘neutral’ and that government spending crowds out private investment. Rather, we argue, finance plays a key role in determining the trajectory of the macroeconomy because of bank’s ability to create new money and purchasing power via their lending activity. This creates the opportunity for new innovations and shifts in the direction of growth – however, without public intervention, the private financial sector can become overly short-termist and fail to support public purpose. Goverment investment can also influence the direction of growth by reducing uncertainty and raising expectations and opportunities in particular sectors of the economy.
Projects
Partners for a New Economy, European Climate Foundation, INSPIRE (ClimateWorks Foundation)
Innovate UK, DOLFINS, Centro di Ricerche e Documentazione Piero Sraffa and Department of Economics Roma Tre University
Publications
- Determinants of income shares and the stable middle in post-socialist China, Giorgos Gouzoulis, Collin Constantine
- When homes earn more than jobs: the rentierization of the Australian housing market, Josh Ryan-Collins, Cameron Murray
- Theorising and mapping modern economic rents, Mariana Mazzucato, Josh Ryan-Collins, Giorgos Gouzoulis
- Managing nature-related financial risks: A precautionary policy approach for central banks and financial supervisors, Katie Kedward, Josh Ryan-Collins, Hugues Chenet
- Social structures of accumulation in Greece 1980-2014, Angeliki Papadopoulou, Giorgos Gouzoulis
- Neither crowding in nor out: Public direct investment mobilising private investment into renewable electricity projects, Matteo Deleidi, Mariana Mazzucato and Gregor Semieniuk
- Public investment fiscal multipliers: An empirical assessment for European countries, Matteo Deleidi,Francesca Iafrate, Enrico Sergio Levrero
- Supermultiplier, innovation and the ecosystem: A stock-flow dynamic model, Matteo Deleidi, Riccardo Pariboni, Marco Veronese Passarella
- Credit where it’s due: A historical, theoretical and empirical review, Dirk Bezemer, Josh Ryan-Collins, Frank van Lerven, Lu Zhang
- Bringing the helicopter to ground: A historical review of fiscal-monetary coordination to support economic growth in the 20th century, Josh Ryan-Collins, Frank van Lerven
- Putting austerity to bed: technical progress, aggregate demand and the supermultiplier, Matteo Deleidi, Mariana Mazzucato
- Mission-oriented innovation policies: a theoretical and empirical assessment for the US economy, Matteo Deleidi and Mariana Mazzucato
- The macroeconomic impact of government innovation policies, Paolo Agnolucci, Matteo Deleidi, Vincenzo de Lipsis, Mariana Mazzucato, Josh Ryan-Collins
- The effectiveness and impact of post-2008 UK monetary policy, Matteo Deleidi, Mariana Mazzucato
- Beyond voluntary disclosure: why a ‘market-shaping’approach to financial regulation is needed to meet the challenge of climate change, Josh Ryan-Collins
- We don’t need helicopters for better monetary policy, Josh Ryan-Collins
- More than just a multiplier: quantifying the macroeconomic impact of government innovation policy, Matteo Deleidi, Vincenzo de Lipsis, Mariana Mazzucato, Josh Ryan-Collins and Paolo Agnolucci
- Should credit be guided?, Josh Ryan-Collins
- Central banks up their game on climate change but need to go further and fast, Josh Ryan-Collins
- Shredding the veil: the Wall Street myth rampaging through Main Street, Brendan Maton
- Stephanie Kelton: Rethinking fiscal policy
- Why our banking system is still broken, Josh Ryan-Collins
- Five books to understand financial markets, Mariana Mazzucato
- We don't need helicopters for better monetary policy, Josh Ryan-Collins
- Public budgeting for public purpose, Josh Ryan-Collins
- ‘Cross-border financial flows and global warming in a two-area ecological SFC model’, Matteo Deleidi, Emilio Carnevali, Riccardo Pariboni and Marco Veronese Passarella
- ‘Neither crowding in nor out: Public direct investment mobilising private investment into renewable electricity projects’, Matteo Deleidi, Mariana Mazzucato, and Gregor Semieniuk
- ‘Money creation in the Eurozone: An empirical assessment of the endogenous and the exogenous money theories’, Matteo Deleidi and Giuseppe Fontana
- Public investment fiscal multipliers: An empirical assessment for European countries, Matteo Deleidi, Francesca Iafrate & Enrico Sergio Levrero
- Putting Austerity to Bed: Technical Progress, Aggregate Demand and the Supermultiplier, Matteo Deleidi, Mariana Mazzucato
- Climate change challenges for central banks and financial regulators, Emanuele Campiglio, Yannis Dafermos, Pierre Monnin, Josh Ryan-Collins, Guido Schotten & Misa Tanaka
- Post Keynesian endogenous money theory: A theoretical and empirical investigation of the credit demand schedule, Matteo Deleidi
- Post Keynesian endogenous money theory: Horizontalists, structuralists and the paradox of illiquidity, Matteo Deleidi
- The money creation process: A theoretical and empirical analysis for the United States, Matteo Deleidi and Enrico Sergio Levrero
News and events
- Money, credit and finance (video), Josh Ryan-Collins, W8 academic lecture
How the UK government finances its spending: an Accounting Model of the UK Exchequer (video), Josh Ryan-Collins (chair), Asker Voldsgaard (organiser), Andrew Berkeley (speaker), seminar
Funders and partners
Link
Link
Link
Link
Link
Link
Link
Contact
Josh Ryan-Collins
Associate Professor in Economics and Finance
View Josh's profile
j.ryan-collins@ucl.ac.uk
Matteo Deleidi
Honorary Research Fellow
View Matteo's profile
m.deleidi@ucl.ac.uk