Economic Theory of Bank Credit

by Hahn, L. Albert; Matt, Clemens; Hagemann, Harald

• ISBN13: 9780198723073
• ISBN10: 0198723075
• Format: Hardcover
• Copyright: 2015-12-10
• Publisher: Oxford University Press

Summary

L. Albert Hahn published the first edition of the Economic Theory of Bank Credit in 1920 and a radically revised third edition in 1930. Economic Theory of Bank Credit is a clear exposition of a theory of credit and stands in the tradition of Harley Withers, Henry Macleod, and Knut Wicksell. A theory of credit recognizes that banks are not only intermediaries of savings but in fact create money themselves. This idea is paired with a detailed account of the technical processes of the banking sector. In Part Two, Hahn provides an economic account of the effects of credit creation on the economy: banks vary their credit creation activity for various reasons and cause fluctuations in overall economic activity. Hahn therefore develops a monetary theory of the business cycle in the spirit of Schumpeter. The first and third editions draw different conclusions about central bank policy. The first edition is optimistic that an ever-lasting boom could be achieved, whilst the third edition sees the core function of central bank policy as smoothing economic fluctuations.

This edition, translated into English for the first time, enables the reader to revisit this classic contribution to monetary theory. It features a complete translation of the first edition, key elements of the third edition, and a new introduction by Professor Harald Hagemann.

Author Biography

L. Albert Hahn, (1889 - 1968) was a German banker, economist, and university professor at the University of Frankfurt am Main

L. Albert Hahn (1889-1968) was a German banker, economist, and university professor at the University of Frankfurt am Main. He was born into a family of private bankers in Frankfurt am Main on October 12, 1889. Hahn received PhDs from the University of Marburg in law in 1912 and in economics in 1919. He was on the managing board of the family bank, the Deutsche Effecten- und Wechsel-Bank, from 1919 until 1933 whilst also holding an honorary professorship at the University of Frankfurt.


Clemens Matt studied economics in Graz, Nancy, Edinburgh, and Berlin and holds an MSc from the University of Edinburgh. He works for the British Government Economic Service and occupies himself with the history of economic thought in his spare time.

Harald Hagemann is Professor of Economic Theory at the University of Hohenheim, Stuttgart, Germany. He is a life member of Clare Hall, University of Cambridge and is Honorary Past President of the History of Economic Thought. His main areas of research cover growth, structural change, new technologies and employment, and the history of economic analysis. His recent work also focuses on the history of modern business cycle theory and the emigration of German speaking economists after 1933.

Table of Contents

Introduction, Harald Hagemann
Translator's notes
Table of concordance
Economic Theory of Bank Credit
Preface (1st edition)
Preface (2nd edition)
Preface (3rd edition)
Economic Theory of Bank Credit (1st edition)
Introduction
Part One: Credit and Banks
1A. Forms of credit
1B. The extent of credit activities of banks
Part Two: Credit and the Goods Markets
2A. The prevailing opinion on the relationship between credit and capital goods (the influence of capital on credit)
2B. The influence of credit on capital
2C. The effect of credit on savings
2D. Credit and business cycles
Part Three: International Credit
3A. Credit and capital export
3B. Credit and foreign currency
Economic Theory of Bank Credit (3rd edition)
Part One: Credit and Banks
Appendix 1: Forms of granting credit
Part Two: Credit and the Goods Markets
Appendix 2: The influence of credit on goods production
Appendix 3: Credit and capital
Appendix 4: Credit and business cycles
Appendix 5: The limit for inflationary credit expansion