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John B. Davis and Wilfred Dolfsma
David B. Audretsch and Max Keilbach
David Campbell and Matthias Klaes
Geoffrey M. Hodgson
Despite strong interest in market outcomes, economists have previously paid relatively little attention to the institutional structure of markets. But sociologists have often regarded the study of markets as the job of the economist. Consequently, both economists and sociologists have neglected the institutional character of markets. This chapter considers the historical evolution of markets and offers several alternative definitions, involving different degrees of historical specificity. It is argued that recent developments in economics and sociology point to a more nuanced view of markets, involving recognition of different types of market mechanisms and institutions. These developments include work in experimental economics and auction theory, and from socio-economics and economic sociology. A definition of markets is offered that is consistent with these developments.
Pranab Bardhan and Isha Ray
Sheila C. Dow
Monetary policy has gone through significant changes in the wake of the banking crisis that began in 2007, reverting to a more traditional form. Before the crisis, mainstream theory and the practice of monetary policy had been identified as converging on a ‘new consensus’, focused on the role of the interest rate in a neutral-money framework, with an independent central bank prioritizing the control of inflation. There were dissenting voices, notably post-Keynesians anticipating the crisis, focusing on the non-neutrality of money and considering a wider range of monetary policy instruments. The crisis itself forced central banks to consider a wider range of policy goals and to employ a wider range of instruments. Nevertheless a difference persists between the mainstream theoretical approach, which sees monetary policy being transmitted through its impact on expectations in asset markets and asset pricing, and the post-Keynesian approach, which focuses on the transmission through real social experience. We explore current issues for monetary policy in terms of goals and instruments, and the relationship between central banks and government. The chapter concludes by outlining unresolved issues for the future.