Cover IMF Working Papers
Private Finance and Public Policy
Author: Mr. Garry J. Schinasi
Series:
IMF Working Papers
Volume/Issue:
Volume 2004: Issue 120
Language:
English
Publication Date:
01 Jul 2004
DOI:
https://doi.org/10.5089/9781451854305.001
ISBN:
9781451854305
ISSN:
1018-5941
Pages:
43
Keywords:
WP; economic system; public goods; market imperfection; store of value; financial risk; medium of exchange; Finance; Financial Stability; Money; Market Failures; market forces; Financial sector stability; Consumption; Loans; Liquidity; Purchasing power; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper articulates a logical foundation-drawn from disparate literatures-for understanding why safeguarding financial stability is an important economic policy objective. The paper also explains why private aspects of finance provide broader social economic benefits and have the characteristics of public goods. Unique aspects of finance are examined, as are the linkages between finance, money, and the real economy. Sources of market imperfections in finance are identified and their implications are analyzed. The arguments imply that reaping the full private and social economic benefits of finance requires both private-collective and public-policy involvement as well as a delicate balance between maximizing the benefits of positive externalities (and public goods) and minimizing the costs (including potential instabilities) of other sources of market imperfections in finance.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund