【IMI Working Paper No. 1601 [EN]】A General Theory of Macrofinance: Towards a New Paradigm

2016-10-27 IMI

【Abstract】 Purpose - The Global Financial Crisis of 2008 has triggered a reevaluation on economic theory and policy practice, and both economists and financial analysts are reaching a consensus that the financial system plays an important role in the macroeconomy and that macroeconomic theory must be restructured to incorporate endogenous financial factors. Methodology - Based on a reflection on the inherent flaws of traditional mainstream economics, this paper puts forward a Macrofinance Theory as a new paradigm for macro financial analysis. Findings - The macrofinance paradigm regards the financial system as the core element of a complete and endogenous analytical framework. Originality/value - The objective of macrofinance is to construct a scientific methodology by analyzing the inherent laws of modern financial systems in order to establish a comprehensive theoretical framework that unifies the financial sector with the real economy and combines theory with policy making and implementation. 【Keywords】 Macrofinance, Financial System, Real Economy 【Authors】 Chen Yulu, Chairman of IMI Academic Committee; Deputy Governor of People’s Bank of China Ma Yong, IMI Research Fellow; China Financial Policy Research Center, School of Finance, Renmin University of China 【IMI Working Paper No. 1601 [EN]】A General Theory of Macrofinance Towards a New Paradigm

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【IMI Working Paper No. 1601 [EN]】A General Theory of Macrofinance: Towards a New Paradigm

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