Money and Banking by Dr. Robert E Wright
Download Money and Banking by Dr. Robert E Wright book free online – from Money and Banking by Dr. Robert E Wright book; This book is intended for the Money and Banking course and is the first Money and Banking text to emerge from the financial crisis of 2007-2008 with ample coverage.
One of the major functions of the financial system is to tangle with those devilish information asymmetries. It never kills asymmetry, but it usually reduces its influence enough to let businesses and other borrowers obtain funds cheaply enough to allow them to grow, become more efficient, innovate, invent, and expand into new markets.
They do so by eliminating, or at least reducing, two major constraints on liquidity and capital, or the need for short-term cash and long-term dedicated funds. They reduce those constraints in two major ways: directly (though often with the aid of facilitators) via markets and indirectly via intermediaries. Another way to think about that is to realize that the financial system makes it easy to trade intertemporally, or across time. Instead of immediately paying for supplies with cash, companies can use the financial system to acquire what they need today and pay for it tomorrow, next week, next month, or next year, giving them time to produce and distribute their products.