【IMIWorkingPaperNo.1601[EN]】AGeneralTheoryofMacrofinance:TowardsaNewParadigm

【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

【Author】

Chen Yulu: Chairman of IMI Academic Committee; Deputy Governor of People’s Bank of China

Ma Yong: Research Fellow of IMI; China Financial Policy Research Center, School of Finance, Renmin University of China