Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Non-monetary economy wikipedia , lookup
Global financial system wikipedia , lookup
Business cycle wikipedia , lookup
Austrian business cycle theory wikipedia , lookup
Quantitative easing wikipedia , lookup
Real bills doctrine wikipedia , lookup
International monetary systems wikipedia , lookup
Fractional-reserve banking wikipedia , lookup
Modern Monetary Theory wikipedia , lookup
David Bieri ∗ Global Forum on Urban and Regional Resilience, Virginia Tech, Blacksburg, VA Political Space Economy Lab, Ann Arbor, MI GFURR Seminar – March 2015 Urban questions • Why do cities exist? • Why do cities vary in size? • Why do competing firms cluster? • What causes urban growth and decline? • Who benefits from urban growth? How does the monetary-financial system matter for cities in light of these questions? The fluttering veil “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution by tomorrow morning.” Henry Ford (1922) Urban questions • Conventional approaches in urban economics, economic geography do not consider role of monetary-financial system in process of urbanization. • Focus of this research: How the “spatial non-neutrality of money” shapes the American metropolis Historical process of U.S. urbanization driven by changing tension between “money interest” and “the public interest” Develop a spatial theory of financial instability (cf. Lösch Spatial flow of funds view Spatial flow of funds view Source: Copeland (1952) Spatial flow of funds view • Flow of funds view: Integration of “real” and “monetary” sectors, based on economic a/cs by different sectors. • Replacing hydraulic model of money supply (stock of water, flows through pipes, or held in reservoirs by banks) with model of “money as electricity” (Copeland 1947,1952). – Borrowing sectors acquire funds, lending sectors acquire assets in form of promises to pay – No (strict) conceptual separation between supply of and demand for money – Crediting of an account simultaneous generates debit to another account (“ […] just as is the switching on of an electrical appliance and the draw upon electrical capacity” [Mayhew, 2011]) A tale of two hierarchies • Hierarchy of cities: Cities as “organisations”, positioned within a spatial order of economic production. • Hierarchy of money: All money is credit money and credit is always and everywhere fundamentally hierarchical in nature. Credit allocation as a core function of modern states. Historical interaction between urban and monetary hierarchy matters for distribution and evolution of economic activity across space. Trajectory of spatial development and advancement of the monetary-financial system as joint historical process Nexus of hierarchies matters for financial resilience. Outline 1. Money and the city: Ideas, institutions and events 2. A tale of two hierarchies (hierarchy of cities, hierarchy of money) 3. Rethinking the geography of money 4. Detroit’s place in U.S. monetary history Money and the city: Ideas, institutions and events Key hypotheses 1. The evolution of the urban spatial structure is the joint result of the historical urbanization of capital (urban hierarchy) and recurring financial instability (monetary hierarchy), alternatingly emanating from the real sector or the financial sector. 2. These interrelated processes govern spatial risk distribution, financial regulation and government intervention, leading to financial innovation, opening up new financial frontiers. 3. In turn, this creates alternative avenues for the (sub)urbanization of capital, giving rise to new dynamics for the evolution of urban form. Ideas, institutions and events • Ideas about the “nature of money” determine monetary analysis: – Historical representation of economy as system of circular flows evolves with social imaginary. – Common dichotomy across different economic paradigms: “real sector” (production and consumption) and “monetary sector” (money, credit and banking). – Nature of real-monetary nexus as key distinction between schools of economic thought. • Institutions represent the socio-economic arrangements that rest on and are influenced by specific ideas. • Historical events give rise to new theoretical insights/ideas, in turn re-shaping institutions. Ideas, institutions and events Two important ideas unified: The idea of modern money and finance and the Jeffersonian ideal of the spatial arrangement of the metropolis. Ideas, institutions and events • Two misconceptions about money. – Banks act simply as intermediaries, lending out the deposits that savers place with them (“loanable funds theory”) – Central bank determines the quantity of loans and by controlling the quantity of central bank money (“money multiplier approach). • What happens in reality: – Lending creates deposits — broad money determination at the aggregate level. Bank deposits are mostly created by commercial banks themselves. – Banks face limits lending (profitability and regulatory constraints). – Money creation is also constrained by the behaviour of money holders (households and businesses). Ultimate constraint on money creation is monetary policy. Money matters: Stocks and flows “Capital represents itself in the form of a physical landscape created in its own image, created as use values to enhance the progressive accumulation of capital.” – Harvey (1978): “The Urban Process under Capitalism: A Framework for Analysis,” International Journal of Urban and Regional Research, 2(4): 100—131. “To analyze how financial commitments affect the economy it is necessary to look at economic units in terms of their cash flows. The cash flow approach looks at all units – be they households, corporations, state and municipal governments, or even national governments – as if they were banks.” – Minsky (2008): Stabilizing and Unstable Economy, New York: McGraw-Hill, p 221. PK Institutionalism and MMT John R. Commons (1862–1945) Joseph A. Schumpeter (1883–1950) Wesley C. Mitchell (1874–1948) Alvin H. Hansen (1887– 1975) Morris A. Copeland (1896–1989) “Flow of funds” Walter Isard (1919–2010) August Lösch (1906–1945) U. Michigan, 1930s “Spatial price waves, hierarchy of money” Post Keynesian Institutionalism: “Spatial Non-Neutrality of Money” Edgar M. Hoover, Jr. (1907–?) Harvard, early 1950s John M. Keynes (1883– 1946) Hyman P. Minsky (1919 – 1996) “Financial instability” Kiel Institut für Weltwirtschaft , late 1920s Wassily W. Leontief (1906– 1999) Schumpeter’s monetary theory • Long gestation period with many trials and misadventures – Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie (1908), attempts to overcome fissures of the “Methodenstreit” – Das Wesen des Geldes (1970) • Standard approaches to monetary theory are missing: – Determinants of money demand, money supply – Money and real sector interaction, monetary policy • Walrasian GE beginnings abandoned, later emphasis on “institution of money”: – Sociology of money, institutions for social accounting, Money creation by banks – Nature of money, theory of price level, theory of money process and functions of the money market Schumpeter’s monetary theory “Event today, textbooks on Money, Currency and Banking are more likely than not to begin with an analysis of a state of things in which legal tender “money” is the only means of paying and lending ... it may be more useful […] to look upon capitalist finance as a clearings system that cancels claims and debts and carries forward the differences – so that “money” payments come in only as a special case without any particularly fundamental importance. In other words: practically and analytically, a credit theory of money is possibly preferable to a monetary theory of credit.” – Schumpeter (1954, p.717) Circular flows: The Classics Source: Denis (1904) Circular flows: Proto-Keynesians Source: Wagemann (1930) Circular flows: Institutionalists Source: Copeland (1952) Circular flows: Marxists Source: Harvey (1985) Circular flows: DGSE Orthodoxy Source: Del Negro et al. (2013) Ideas, institutions and events Money matters: Theories Economic paradigm Realmonetary Origins of sector economic cycles relationship Nature of crises Spatial consequences Classics Real sector Neutral Resources Not considered Marxism Real sector Non-neutral Overaccumulation Urbanization (Post) Keynesianism Both sectors Non-neutral Financial instability Not considered Neoclassical (RBC) Real sector (Super)neutral Exogenous shocks Not considered Inflation Not considered None Agglomeration Monetarism “New” urban economics, new economic geography Monetary sector Non-neutral Real sector Neutral Source: Bieri (2014a) Price level of financial assets Money, credit (funding flows) Price level of current output Shadow banking Central bank Gold, monetary base Commercial banks Deposits Private sector, NDFIs Securities Hierarchy of money Banking Taxes Goods, services Households, consumers Firms, producers Government Wages, salaries Public expenditures Credit subsidies Interest payments, savings (asset flows) Financial sector Households Use Source Use Source Use Source Use Source Real transactions Ifin Sfin Ih Sh If Sf Ig Sg Financial transactions Afin Lfin Ah Lh Af Lf Ag Lg for each sector, Ii + Ai = Si + Li Firms Government such that: Surplus Si - Ii = Ai - Li : non-financial sources net financial savings Money outflow Ai - Li > 0 Deficit Li - Ai = Ii - Si : financial sources product expenditures Money inflow Li - Ai > 0 REGULATION URBAN HIERARCHY Ideas, institutions and events Colonial settlement, ("Isolierter Staat") Emergent central place ("merchant republic") Negligible regulation Core-periphery contours, emergent urban hierarchy Increasing regulator, rise of fiscal federalism First wave of suburbanisation, city restructuring ("Streetcar suburbs") Economic growth and a new urban form (“Rise of the monocentric city") Strong (direct): Manager, progressive regulatory state (Anti-trust) Suburbanization Spatial sorting and the rise of the polycentric city Strong (indirect 1): Partner, facilitator Global cities (from "Edge cities" to "Boomburbs") Weak (direct): Deregulation, “Washington Consensus” Strong (indirect 2): "Too big to fail“, re-articulation of regulatory state FINANCIAL INNOVATION Financialisation Pre-1800s: Stock exchange, insurance company, central bank Mutual fund (1774, NL); Inflation-linked bond (1780, USA) Modern mutual fund (1924, USA) Mortgage Exchange-traded Venture capital industry Leveraged buy-out securitization fund (1993, CA) (1940s, USA) (1955, USA) (1970, USA) Black-Scholes Credit default Hedge fund (1949, USA) ATM (1967, UK) option pricing swap (1994, USA) (1973, USA) Algorithmic, highfrequency trading >50% of all trades (2012) MONETATRY REGIME Gold standard 1: Fixed exchange rates, free banking BANKING DEVELOPMENT Bimetallism Stage 1: Deposit taking only Stage 2: Bank liabilities as means of payment Spatial and monetary hierarchy BANKING REGULATION Central Banking 1: First and Second Bank of the United States (1791-1836) Free Banking (1836-1863) Gold standard 2: Specie standard, fixed exchange rates, central banking Stage 3: Inter-bank lending, collective credit expansion National Currency Act (1863), National Bank Act (1864) Gold standard 3: Gold exchange standard, Interwar period Pre-convertible Bretton Woods Stage 4: Central bank as "lender of last resort", endogenous bank reserves Federal Reserve Act (1913) McFadden Act (1927) Federal Home Loan Bank Act of 1932 Banking Act of 1933 (Glass-Steagall) Post-Bretton Woods 1: Managed float Convertible Bretton Woods Stage 5: Liability management with banks seeking both lending opportunities and deposits Bank Holding Company Acts (1956, 1970) Bank Merger Acts (1960, 1966) Post-Bretton Woods 2: Free floating Stage 7: Central bank as the "dealer of last resort", quantitative easing and "monetization" of fiscal policy Stage 6: Securitization, offbalance sheet credit creation International Competitive Equality Banking Act (1978) Bank Act (1987) Federal Credit Union Act (1970) Savings and Loan Holding Company Act (1968) Depository Institutions Deregulation and Monetary Control Act (1980) Financial Services Modernization Act (1999, Gramm-Leach-Bliley) Depository Institutions Act (1982, Garn-St. Germain) Financial Institutions Reform, Recovery and Enforcement Act (1989) Home Mortgage Disclosure Act (1975) Community Reinvestment Act (1977) Financial Services Regulatory Relief Act (2006) Interstate Banking and Branching Efficiency Act (1994, Riegle-Neil) Wall Street Reform and Consumer Protection Act (2010, Dodd-Frank) Emergency Economic Stabilization Act (2008) American Recovery and Reinvestment Act (2009) Federal Housing Finance Regulatory Reform Act (2008) Ideas, institutions and events Source: Bieri (2014) Money matters: Stocks and flows “Capital represents itself in the form of a physical landscape created in its own image, created as use values to enhance the progressive accumulation of capital.” – Harvey (1978): “The Urban Process under Capitalism: A Framework for Analysis,” International Journal of Urban and Regional Research, 2(4): 100—131. “To analyze how financial commitments affect the economy it is necessary to look at economic units in terms of their cash flows. The cash flow approach looks at all units – be they households, corporations, state and municipal governments, or even national governments – as if they were banks.” – Minsky (2008): Stabilizing and Unstable Economy, New York: McGraw-Hill, p 221. Form follows financialization Source: Home Owners Loan Corporation (1935) Form follows financialization Source: Bunge’s “Fitzgerald: Detroit Geographical Expedition and Institute” (1971) Form follows financialization Regional flow of funds Source: Isard (1960) Regulatory-space dialectic Source: Abel and Deitz (2010) Regulatory-space dialectic Source: Bieri (2014) Regulatory-space dialectic Notes: Metro area extrusions are proportional to total losses from FDIC-supervised depository institutions as a percentage of metropolitan GDP. Area shading reflects the total number of failed institutions per metro area (light grey: 1-5 failures, black: 20-59 failures). Source: Author’s calculations from FDIC Historical Statistics on Banking and BEA data. Regulatory-space dialectic Regulatory-space dialectic Notes: Metro area extrusions are proportional to cumulative borrowing by depository institutions via the Federal Reserve’s Discount Window as a percentage of metropolitan GDP. Area shading reflects the average loan-to-value ratio for banks (credit outstanding as share to total collateral pledged) per metro area (ranging from light grey: 3-5% LTV to black: 70-85% LTV). Source: Author’s calculations from Federal Reserve data on discount window lending and BEA data. Source: Author’s calculations FRB micro data. Regulatory-space dialectic GSE loan sales by banks, 2006. Private loan sales by NDFIs, 2006. Notes: In panel (b), metro area extrusions are proportional the share of total loan sales by NDFIs – this is the y-axis variable in panel (a). Area shading reflects the relative share of securitisation by GSEs (this is the x-axis variable in panel (a) – ranging from dark grey: 15-20% to dark red: 60-70%). In panel (c), extrusions are proportional to the volume of loan sales/securitisation by NDFIs as a percentage of MSA GDP. Area shading reflects the relative share of private label securitisation by NDFIs (ranging from dark grey: 40-50% to dark red: 95-99%). Source: Author’s calculations from HMDA microdata, BEA and Census Bureau data. Regulatory-space dialectic Source: Pozsar et al. (2013) Regulatory-space dialectic Source: IMF (2014) A tale of two hierarchies: The hierarchy of cities and hierarchy of money A tale of two hierarchies • Hierarchy of cities: Cities as “organisations”, positioned within a spatial order of economic production. • Hierarchy of money: All money is credit money and credit is always and everywhere fundamentally hierarchical in nature. Credit allocation as a core function of modern states. Historical interaction between urban and monetary hierarchy matters for distribution and evolution of economic activity across space. Trajectory of spatial development and advancement of the monetary-financial system as joint historical process (Bieri 2013). Hierarchy of cities • Cities as “organisations” within a spatial order of economic production – Diversity in size and scope from differences in scale economies relative to per-capita demand. – Small number of large cities and large number of small cities – Place in hierarchy is changing over time, depending on relative specialisation Phase 1: Frontier Phase 2: Plowback Phase 3: Secondary Growth Source: Conzen (1975) Urban hierarchy: Theories • Path dependency vs. standard narrative • Higher productivity occurs because – large cities disproportionately attract both high- and lows-skilled (“extreme-skill complementarity” of spatial sorting), – large cities select more productive entrepreneurs and firms – agglomeration economies (sunk cost, IRS) • Urban efficiencies (“contrasts in agglomeration”) depend on – Numbers (such as city or industry size), – Nature of urban interactions (“The whys and wherefores of urban diversification” Chinitz 1961; Jacobs 1969) Urban hierarchy: Laws of motion • Agglomeration economies differ in important ways – localization economies attenuate rapidly across space – industrial organization affects the benefits of agglomeration • The microeconomic determinants of agglomeration – – – – – 3 Marshallian transportation costs: “goods, people, ideas” Input-output linkages (input sharing, product shipping costs) Labor market pooling Knowledge spillovers Natural advantage (“first geography” vs. “second geography”) • “Coagglomeration” matters – General tendency of various industries to locate together, – Clusters … Hierarchy of money • All money is credit money and credit is always and everywhere fundamentally hierarchical in nature – The modern monetary-financial system (MFS) is hierarchical in finance and in power (“taxes drive money”, “lender/dealer of last resort”). – MFS is a hybrid where public liabilities (“outside money”, a net asset to the private sector) and private liabilities (“inside money”) – Spatial relationship between financial variables and institutional functions matters for urban development (e.g. interest rates or credit intermediation) – Hierarchy of money shifts across economic cycle through three phases (hedge finance, speculative finance and Ponzi schemes) – Money and credit fluctuate between states of discipline and states of elasticity (cf. Mehrling 2012). Hierarchy of money • Hierarchy of money: Money Credit Gold Currency Deposits Securities • Hierarchy of balance sheets: Central Bank Banking System Private Sector Assets Liabilities Assets Liabilities Assets Liabilities Gold Currency Curreny Deposits Deposits Securities Securities Source: Adapted from Mehrling (2012) Monetary hierarchy: Theories • Two main approaches to monetary theory • Money as a medium of exchange, unit of account and store of value – Money is a numéraire good, arising from portfolio preferences, intermediation technologies and high-powered government money – Monetary sector forms “veil” behind which “real economy” operates • Money as a form of credit (“credit theory of money”) – Promise to pay income at some future point. – Debt claims to assured income flows provide liquidity which can be bought or sold) – Taxes-drive money view Monetary hierarchy: Laws of motion • Business cycles across different economic paradigms: – Marxian: M – C – M’ – Keynesian: Y = C + I + G + (X-M) – Monetarist: PY = MV (Quantity Theory) – Flow of funds: sources of funds = uses of funds (endogenous money) • Re-theorising money and finance within economic geography – Taking history and institutions seriously – Theorizing spatial aspects of the monetary-financial system Monetary hierarchy: Mechanics • Business cycles across different economic paradigms: – Marxian: M – C – M’ – Keynesian: Y = C + I + G + (X-M) – Monetarist: PY = MV (Quantity Theory) – Flow of funds: sources of funds = uses of funds (endogenous money) • Re-theorising money and finance within economic geography – Taking history and institutions seriously – Theorizing spatial aspects of the monetary-financial system Money matters “[M]oney plays a part of its own and affects motives and decisions and is, in short, one of the operative factors in the situation, so that the course of events cannot be predicted, either in the long period or in the short, without a knowledge of the behaviour of money between the first state and the last.” – Keynes (1933, p.123) “The essential problem is whether any macroeconomic theory that is constructed upon a set of assumptions from which the proposition that money and finance are neutral is derived can be a serious guide to understanding our economy and to the development of policies for our economy.” – Minsky (1993, p.77) Money matters “The supposed relationship between [economic quantities] falls down because the variables are not constituted or linked in a mechanistic way. It would be better to conceive of the financial system not as a machine but as an organism, which includes automatic reflexes, processes of substitution and immune systems which frustrate intervention and control. Just as in the human body, successful remedial action is possible, but it is more complex and difficult than a mechanistic theory would suggest.” Hodgson, G. (1993): “The Economy as an Organism — Not a Machine,” Futures, 25(3): 392—403. Rethinking the geography of money Treatment of money in regional analysis • Mainstream urban and regional economics is fully “neoclassical” (including NEG or “geographical economics”) • Economic geography is steeped Marxian political economy (largely without M–C–M’ or MELT) • A case of “Hamlet without the Prince”? Mostly, but there are important exceptions: – Regional differentials in the cost of credit (Lösch, 1954) – Keynesian theory of regional financial markets (Dow, 1986) – A Post Keynesian perspective on the relation between banking and regional development (Chick and Dow, 1988) Circular flows: Regional perspectives Source: Kircher (1962) A tale of two hierarchies Source: Kircher (1962) Geographies of money • Little “monetary content” of contemporary economic geography, despite active research on financialisation • Marxian and other classical approaches focus on accumulation (“Hamlet without the prince”) – Spatial re-switching of capital (Harvey’s “spatial fix”) – Sheppard and Barnes’ (1990) The Capitalist Space Economy: Geographical Analysis after Ricardo, Marx and Sraffa • Re-theorise “real-financial linkages” by spatialising the Post Keynesian approach to monetary theory – Circular cumulative (spatial) causation and financial instability, not accumulation (Kalecki & Kaldor meet Minsky) – Inherent hierarchy of money matters for the hierarchy of spatial development (Knapp & Hawtrey meet Lösch) Towards a spatial “money view”? • Spatialisation of the hierarchies of money: – Gold, currency, deposits and securities – Balance sheets, market makers: Central bank, banks (small and big), dealers and money funds – Prices: Exchange rate, par, interest rate • Spatial hierarchy of money is dynamic across the economic cycle, expanding and contracting in quality and quantity (cf. Mehrling 2011, 2012) Detroit’s place in U.S. monetary history (1805 – present) Detroit in U.S. monetary-financial history • Stereotype of land-capital dynamics: Detroit’s rise and fall are largely driven by successive stages of monetaryfinancial evolution that enabled speculative real estate development. • Prototype of financial instability: Institutional origins of financial instability and banking-led crises in Michigan begin in 1830s (Free Banking). Detroit is at the epicenter of 1933 banking crisis; municipal bankruptcy precedent in 2013. • Archetype of frontier finance; As the financial frontier moves across time and space, different “zones of exclusion” emerge (mortgage speculation, large scale vacancies, financial illiteracy, underbanked sections of the population). “Frontier Finance”: 1805–1815 • After great fire of 1805, the Bank of Detroit begins, without any congressional authorisation. • Gov. Hull and Woodward leave for Washington in 1805 to meet with Congress to craft the legislation to incorporate the City, and authorise the Woodward Plan and banking. • Bank of Detroit is a true pioneer and has no competitor west of the Alleghenies. • Paper currency swindle leads to closing of several Detroit banks. Law passed that prohibited unauthorized banking. • First Bank of the United States’ charter expires in 1811. End of first era of centralised frontier finance. “Frontier Finance”: 1816–1845 • Reorganisation of Northwest Territory opens up the western frontier to development ($1.5/acre) – Huge influx of population and land speculation. Capital shortage. – Michigan is deemed to become the wealthiest state in the Union. • Bank of Michigan chartered in 1817 with primarily east coast Whig money and General Lewis Cass. Michigan State Bank founded in 1835 by John R. Williams with the help of Albany capitalists. • Second Bank of the United States is chartered from 1816 to 1836. End of second episode of central banking • Michigan pioneers free banking legislation in 1837, banks jumps dramatically. Other states follow and adopt “Free Banking Acts” “Frontier Finance”: 1933 • The deepest banking crisis of the Great Depression touched off by failure of two Detroit banks in early 1933 (Guardian National Bank of Commerce and the First National Bank in Detroit among five largest national bank casualties). • Henry Ford threatens to pull funds out of Michigan banks; Bank holiday in Michigan to prevent bank run, followed by national bank holiday shortly thereafter (Emergency Banking Act of 1933). • Reconstruction Finance Corporation and Alfred Sloan (GM) create the National Bank of Detroit. Federal funding and assumed assets of the two failed Detroit banks (First National Bank of Detroit and the Guardian National Bank of Commerce) “Frontier Finance”: 2000–date • With Wall Street’s help, Detroit under the Kilpatrick Administration borrows $1.44 billion to restructure pension fund debt. ($2.8 billion over the next 22 years; represents nearly one-fifth of the city’s debt) • Kresge Foundation and other industrio-philantropic interests emerge as key players in pre-crash Detroit real estate market, looking to invest in Downtown (waterfront) and Midtown areas, the City puts out a plan to shrink the city. • Dan Gilbert’s Quicken Loan emerges as one of the largest nondepository mortgage credit intermediaries of the Great Housing Boom, with large presence in the US subprime markets. “Frontier Finance”: 2000–date • Real estate crash and new urban renewal – Kresges pull funding from smaller projects and invest in Detroit Future City Plan. – Gilbert emerges the new “Charles Trowbridge (1800-1883)”, a key frontier financier, and with a visionary financial commitment to downtown and Midtown • Financialisation, bankruptcy and post-crisis rebirth – One of the country’s largest-ever urban farming projects gets green light from Detroit and state officials. (Hantz Farms, 140 acres of land on Detroit’s east side, owned by Hantz Group, primarily a financial services company) – Developers propose to buy Belle Isle “Frontier Finance” • Three interrelated themes emerge: – Co-movement of capital flows and changes in the urban functional hierarchy – Socio-spatial evolution of the frontier concept – Michigan’s “money men” and Detroit’s “cathedrals of finance” “Frontier Finance” • Three interrelated themes emerge: – Co-movement of capital flows and changes in the urban functional hierarchy – Socio-spatial evolution of the frontier concept – Michigan’s “money men” and Detroit’s “cathedrals of finance” “Money interest” vs. “Public interest” Detroit is at the epicenter of cyclical instability driven by the spatio-temporal evolution of the U.S. monetary-financial system and its urban hierarchy. – “Proto-Central Banking” (1795 – 1815) – “The Great Banking Experiment” (1816 – 1845) – “The Great Banking Crash” (1933) – “The Securitisation Bubble” (2000– ) and the post-crisis normal Central tension between “money interest” and “public interest” as a key theme for the last two centuries of Detroit’s economic history REFERENCES – I Abel, Jason R. and Deitz, Richard. 2010. “Bypassing the Bust: The Stability of Upstate New York’s Housing Markets during the Recession,” FRBNY Current Issues in Economics and Finance, 16(3): 1–9. Adrian, Tobias, and Hyun Song Shin. 2010. “The Changing Nature of Financial Intermediation and the Financial Crisis of 2007–09.” Annual Review of Economics 2(1): 603–18. Bieri, David S. 2009. “Financial Stability, the Basel Process and the New Geography of Regulation.” Cambridge Journal of Regions, Economy and Society 2(2): 303-331. Bieri, David S. 2013. “Form Follows Function: On the Relationship between Real Estate Finance and Urban Spatial Structure.” CriticalProductive 2(1): 7–18. Bieri, David S. 2014. “Financial Stability Rearticulated: Institutional Reform, Post-Crisis Governance, and the New Regulatory Landscape in the United States ,” in Iglesias-Rodrígues, P. (Ed.) Building Responsive and Responsible Regulators in the Aftermath of the Financial Crisis, Cambridge, Intersentia Publishers. Bunge William Wheeler, Jr. Fitzgerald: Geography of a Revolution. 2nd ed. Athens, GA: University of Georgia Press. Conzen, Michael P. 1975. “Capital Flows and the Developing Urban Hierarchy: State Bank Capital in Wisconsin, 1854–1895” Economic Geography 51(4): 321–338. Copeland, Morris A. 1952. A Study of Moneyflows in the United States. Cambridge, MA: National Bureau of Economic Research. Denis, Hector. 1904. Histoire Des Systèmes Économiques et Socialistes. Paris: V. Giard & E. Briére. Diamond, Douglas W. and Dybvig, Philip H. 1983. “Bank Runs, Deposit Insurance, and Liquidity,” Journal of Political Economy, 91(3): 401– 419. Dillard, Dudley. 1980. “A Monetary Theory of Production: Keynes and the Institutionalists,” Journal of Economic Issues,14(2): 255–272. Dillard, Dudley. 1987. “Money as an Institution of Capitalism ,”Journal of Economic Issues, 21(4):1623–1647. Föhl, Carl. 1937.Geldschöpfung und Wirtschaftskreislauf. Munich: Duncker und Humblot. Harvey, David. 1985. “The Urbanization of Capital: Studies in the History and Theory of Capitalist Urbanization.” In Baltimore: John Hopkins University Press, 1–31. Ingham, Geoffrey. K., Kain, John F. and Ginn, J. Royce. 1972. The Detroit Prototype of the NBER Urban Simulation Model, New York: Columbia University Press. Isard, Walter. 1960. Methods of Regional Analysis. Cambridge, MA: MIT Press. Jevons, W Stanley. 1884. Investigations in Currency and Finance. London: MacMillan and Co. Kiyotaki, Nobuhiro and Moore, John. 1997. “Credit Cycles,” Journal of Political Economy, 105(2): 211–248. REFERENCES – II Kim, Sukkoo. 2007. “Changes in the Nature of Urban Spatial Structure in the United States, 1890–2000,” Journal of Regional Science, 47(3): 273–287 Kircher, Harry B. 1962. “The Geography of Financial Agglomeration in the United States.” Ph.D. Dissertation, Clark University. Labasse, Jean. 1974. L'Éspace Financier: Analyse Géographique. Paris: Armand Colin. Lefebvre, Jean-François. 1970. La Révolution Urbaine. Paris: Gallimard. Lösch, August. 1940. Die räumliche Ordnung der Wirtschaft: Eine Untersuchung über Standort, Wirtschaftsgebiete und internationalen Handel . Jena: Gustav Fischer. Lösch, August. 1940. Geographie des Zinses. Die Bank, 33:24–28. Lösch, August. 1941. “Die Lehre vom Transfer – neu gefaßt.” in von Zwiedineck-Sündenhorst, O. and Albrecht, G. (Eds.) Abhandlungen Jahrbücher für Nationalökonomie und Statistik, Jena: Gustav Fischer, Band 154: 385–402. Lösch, August. 1949. “Theorie der Währung: Ein Fragment,“ Weltwirtschaftliches Archiv, 62: 35–88. Lösch, August. 1954. The Economics of Location, New Haven: Yale University Press. Mehrling, Perry G. 1997. The Money Interest and the Public Interest: American Monetary Thought, 1920–1970 , Cambridge, MA: Harvard University Press. Mehrling, Perry G. 2011. The New Lombard Street: How the Fed Became the Dealer of Last Resort. Princeton University Press. Mehrling, Perry G. 2012. “The Inherent Hierarchy of Money”, Mimeograph, Barnard College, Columbia University. Minsky, Hyman P. 1992. “Taking Schumpeter's Methodology Seriously” in Scherer, F. M. & Perlman, M. (Eds.) Entrepreneurship, Technological Innovation, and Economic Growth, Ann Arbor: University of Michigan Press, 363--370. Minsky, Hyman P. 1992. “On the Non-Neutrality of Money,” Federal Reserve Bank of New York Quarterly Review 18(1): 77–82. Minsky, Hyman P. 2008. Stabilizing an Unstable Economy. New York: McGraw Hill. Pozsar, Zoltan, Tobias Adrian, Adam Ashcraft, and Hayley Boesky. 2013. “Shadow Banking.” Federal Reserve Bank of New York Economic Policy Review 19(4): 1–17. Schumpeter, Joseph A. 1954. History of Economic Analysis, New York: Oxford University Press. Studenski, Paul. 1958. The Income of Nations: Theory, Measurement, and Analysis Past and Present. New York: New York University Press. Thompson, G F. 1998. “Encountering Economics and Accounting: Some Skirmishes and Engagements.” Accounting, Organizations and Society 23(3): 283–323. Tobin, James. 1958. “Liquidity Preference as Behavior Towards Risk,” Review of Economic Studies, 25(3): 65–86. Wagemann, Ernst F. 1930. Economic Rhythm: A Theory of Business Cycles. 1st ed. New York, NY: McGraw Hill. Wagemann, Ernst F. 1940. Wo Kommt Das Viele Geld Her? Geldschöpfung Und Finanzlenkung Im Kriege. Düsseldorf: Völkischer Verlag GmbH. UPCOMING LUNCH DISCUSSION April 16th, 2015 12:00-1:30 PM Resilient Freight Networks & Regulatory Spaces by Marc Fialkoff PhD Student, PGG GFURR Ste. 312 – Kent Square