Competition and Finance A Reinterpretation of Financial and Monetary Economics

Competition and Finance offers a new, unified treatment of the fields of financial and monetary economics. The first part deals with financial economics and begins by providing a coherent and up-to-date analysis of contract design and capital structure. It integrates recent developments in agency theory, information economics and related fields into a unified financial theory of the firm. It then turns to financial intermediation, and explains why financial intermediaries exist and take the forms they do. The simpler forms of financial intermediary - brokers and mutual funds - are then covered in one chapter each. These are followed by three chapters that set out a new treatment of the economics of banking. These provide an up-to-date theory of the banking firm, but they also cover a variety of other banking issues - including, among others, the structure of the banking industry, a new analysis of free banking, a review of recent theoretical work on banking stability, and an assessment of the need for central banking.