A Systems Perspective on Financial Systems (Communications in Cybernetics, Systems Science and Engineering 6)

A Systems Perspective on Financial Systems (Communications in Cybernetics, Systems Science and Engineering 6)

By: Jeffrey Yi-Lin Forrest (author)Hardback

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This book is devoted to a systems-theoretical presentation of the main results of applying the systemic yoyo model and relevant analytical tools to the topics of money and financial institutions. The author presents the main concepts and results of the subject matter in the language of systems science, which has in the past century prompted revolutionary applicati ons of systems research in various subfields of traditional disciplines. This volume applies a brand new logic of reasoning to some of the unsett led problems in the area of money and banking. Due to the particular systemic approach employed, the reader will be able to see how different economic activities are implicitly related to each other and how financial decisions are holistically made in reference to seemingly unrelated events. That is, the learning of this particular subject matter takes place at a different, more elevated level, from which, among others, economies are respectively seen as both closed and open systems; their interactions emulate those of rotational pools of fluids. This book can be used as a textbook for researchers and graduate students in economics, finance, systems science, and mathematical / systems modeling. It will also be useful as a reference book for applied economists and various policy makers.

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About Author

Dr. Jeffrey Yi-Lin Forrest, also known as Yi Lin, holds all his educational degrees (BS, MS, and PhD) in pure mathematics from Northwestern University (China) and Auburn University (USA) and had one year of postdoctoral experience in statistics at Carnegie Mellon University (USA). Currently, he is a guest and specially appointed professor in economics, finance, systems science, and mathematics at several major universities in China, including Huazhong University of Science and Technology, National University of Defense Technology, Nanjing University of Aeronautics and Astronautics, and a tenured professor of mathematics at the Pennsylvania State System of Higher Education (Slippery Rock campus). Since 1993, he has been serving as the president of the International Institute for General Systems Studies, Inc. Along with various professional endeavors he organized, Dr. Forrest has had the honor to mobilize scholars from over 80 countries representing more than 50 different scientific disciplines. Over the years, he has served on the editorial boards of 11 professional journals, including Kybernetes: The International Journal of Cybernetics, Systems and Management Sciences, Journal of Systems Science and Complexity, International Journal of General Systems, and Advances in Systems Science and Applications. And, he is the editor of the book series entitled "Systems Evaluation, Prediction and Decision-Making", and the editor of the book series "Communications in Cybernetics, Systems Science and Engineering", both published by Taylor and Francis with the former since 2008 and the latter since 2011. Some of Dr. Forrest's research was funded by the United Nations, the State of Pennsylvania, the National Science Foundation of China, and the German National Research Center for Information Architecture and Software Technology. Professor Jeffrey Forrest's professional career started in 1984 when his first paper was published. His research interests are mainly in the area of systems research and applications in a wide-ranging number of disciplines of the traditional science, such as mathematical modeling, foundations of mathematics, data analysis, theory and methods of predictions of disastrous natural events, economics and finance, management science, philosophy of science, etc. As of the end of the summer of 2013, he had published over 300 research papers and over 40 monographs and edited special topic volumes by such prestigious publishers as Academic Press, Elsevier, Kluwer Academic, Springer, Taylor and Francis, Wiley, World Scientific, and others. Throughout his career, Dr. Jeffrey Forrest's scientific achievements have been recognized by various professional organizations and academic publishers. In 2001, he was inducted into the honorary fellowship of the World Organization of Systems and Cybernetics.


PART 1 Preparation 1 Overview 1.1 The basics of money 1.1.1 The meaning and function of money 1.1.2 Different kinds of money 1.2 Why is a systemic approach important? 1.2.1 A two-dimensional spectrum of knowledge 1.2.2 The systemic yoyo model 1.3 Problems investigated using systems thinking and methodology 1.3.1 Problems systems science could address 1.3.2 Is 1 + 1 = 2 universally true? 1.3.3 How modern science resolves problems? 1.4 Main results of this book 2 The yoyo mode: Properties and justifications 2.1 Properties of systemic yoyos 2.1.1 The field structure 2.1.2 The quark structure of systemic yoyos 2.2 Laws on state of motion 2.2.1 The first law on state of motion 2.2.2 The second law on state of motion 2.2.3 The 3rd and 4th laws on state of motion 2.2.4 Validity of figurative analysis? 2.3 Theoretical justifications 2.3.1 Blown-ups: Moments of transition in evolutions 2.3.2 Mathematical properties of blown-ups 2.3.3 The problem of quantitative infinity 2.3.4 Equal quantitative effects 2.4 Empirical justifications 2.4.1 Bjerknes' circulation theorem 2.4.2 Conservation of informational infrastructure 2.4.3 Silent human communications PART 2 Domestic financial system: Seen as a closed system 3 The financial infrastructure 3.1 Composition of the financial system 3.2 Monetary standard of currencies 3.3 Definition of money 3.4 Credit 3.5 Financial markets 3.6 The banking system 3.6.1 The modern banking system 3.6.2 The banking business 3.7 Innovation: Livelihood of national financial infrastructure 3.8 Some final remarks 4 Supply and demand of money 4.1 The concept of supply and demand: Two interacting economic forces 4.2 The supply of money 4.2.1 Creation of currency 4.2.2 Monetary multiplier 4.2.3 Money supply models 4.3 The demand of money 4.3.1 Classical quantity theory of money The theory of cash transactions The cash balance theory The income quantity theory 4.3.2 Keynesian demand for money 4.3.3 Further developments of Keynesian theory 4.3.4 Modern quantity theory of money 4.3.5 Empirical tests of money demand Interest rate and demand for money Stability of the demand for money Circulation speed of money 4.4 A few final comments 5 Interest: A factor influencing monetary supply and demand 5.1 Loanable funds 5.2 Liquidity preference 5.3 Interest rate and total output 5.4 Risk structure of interest rates 5.5 Term structure of interest rates 5.6 Market behaviors and response to different-scale investment opportunities 5.7 Some concluding words 6 Monetary policy: Another factor influencing monetary supply and demand 6.1 Goals of monetary policy 6.1.1 Tasks and contents of monetary policy 6.1.2 Goals of monetary policy 6.2 Medium-term goals of monetary policy 6.3 Tools of monetary policy 6.4 Conduction mechanism of monetary policy 6.5 Empirical analysis on the importance of money 6.6 Money and fiscal policies in the IS-LM model 6.6.1 Movement of IS curve 6.6.2 Movement of LM curve 6.6.3 Movement of total output and interest rate 6.6.4 The crowding-out effect 6.7 Inflation 6.7.1 The phenomenon 6.7.2 Price levels of goods 6.7.3 Causes of inflation 6.7.4 Game theory explanation of stagflation phenomena 6.7.5 Dealing with inflation 6.8 Systemic structure of monetary policy 7 Portfolio of assets 7.1 Constant existence of investment opportunities 7.1.1 Economic yoyo flows 7.1.2 A simple model for perfect capital markets 7.1.3 A simple model when capital markets are imperfect 7.2 Interest rates and yields 7.2.1 Present values 7.2.2 Yield to maturity 7.2.3 Prices, rates of return, and yields of bonds 7.3 Factors affecting portfolio choices 7.4 Balance between risk and yields 7.4.1 Diversity of investment 7.4.2 Mean variance utility 7.4.3 Determination of the portfolio proportion 7.4.4 Estimate of the ss coefficient 7.4.5 Portfolio proportions 7.4.6 Asset pricing 7.5 Portfolio selection 7.5.1 Expected yields of portfolios 7.5.2 Demand of assets 7.5.3 Advantages of diversity PART 3 International financial system: Seen as an ocean of interacting semi-closed systems 8 International Monetary System 8.1 Introduction of the international monetary system 8.1.1 The composites of the IMS 8.1.2 Classifications of the IMS 8.1.3 The functions of the IMS 8.2 Development of the IMS 8.2.1 The international gold standard 8.2.2 The Bretton Woods System 8.2.3 The Jamaica system 8.3 Improvements on the IMS 8.3.1 Main suggestions for improving the IMS 8.3.2 An expected future of the IMS 8.4 The European monetary system 8.4.1 The history 8.4.2 The European Union of money 8.4.3 Economic impacts of the euro 8.5 International organizations of finance 8.5.1 The International Monetary Fund 8.5.2 The World Bank Group 8.5.3 Bankruptcy of nations: An ongoing thought 8.6 The three-ringed structure of stable economic systems 8.6.1 Three-ringed systemic structure of each economic system 8.6.2 Economic energy and three-leveled energy transformation 8.6.3 Non-conservative evolution of economic energy 8.7 Some final words 9 International reserves and capital flows 9.1 Introduction to international reserves 9.1.1 Characteristics of international reserves 9.1.2 Components of international reserves 9.1.3 Borrowed international reserves 9.2 Management of international reserves 9.2.1 The management of magnitudes 9.2.2 The structural management 9.2.3 Reserves of the USA, Europe, Japan, and Great Britain 9.3 Potential problems regarding foreign currency reserves 9.3.1 The problem of capital flight 9.3.2 The problem of credibility 9.3.3 The problem of currency substitution 9.4 Capital flows across national borders 9.4.1 Types of international capital flows 9.4.2 Causes, present state and expected future of capital flows 9.4.3 Impacts of international capital flows 9.4.4 International capital flows and national financial systems 9.5 Interactions between economic yoyo fields 9.5.1 Classification of economic yoyo fields 9.5.2 Combinations of economic yoyos through meridian fields 10 Financial globalization and its consequences 10.1 The structure of the international financial market 10.1.1 The international money market 10.1.2 The international capital market 10.1.3 The Euro currency market 10.1.4 International foreign exchange 10.2 Causes and effects of international capital flow 10.2.1 Characteristics of capital flow in the international market 10.2.2 Reasons for international capital flows 10.2.3 Positive effects of international capital flows 10.2.4 Impacts of capital flows on domestic and international equilibria 10.3 Debt and bank crises: Impacts of financial globalization 10.3.1 Debt crises of developing countries 10.3.2 Bank crises 10.4 Currency crises: Impacts of financial globalization 10.4.1 The concept of currency crises 10.4.2 Causes of currency crises 10.4.3 Asian currency crises: A real-life case 10.4.4 Solution to currency crises as analyzed using Asian scenario 10.5 Will financial attacks be always possible? 10.5.1 How environments determine the nature of economies 10.5.2 Existence of financial centers under different regulations 10.5.3 Centralizable economies 10.5.4 Forever existence of emerging economic centers 11 Financial crises and currency wars 11.1 International financial crises 11.1.1 Financial crises and currency crises 11.1.2 Theories of international financial crises 11.2 Speculative attacks and currency crises 11.2.1 Short-term capital flows and speculative attacks 11.2.2 Recent speculative attacks and currency crises 11.2.3 New characteristics of recent speculative attacks 11.2.4 Chilean capital account liberation: A case of success 11.3 Currency wars and possible self-defense 11.3.1 One possible form of currency wars 11.3.2 A strategy of self-protection A model for categorized purchasing power Functional relationship between P and (D - S) Separating economic categories by using feedback A strategy for national defense 11A Feedback: A general systems approach 11A.1 Introduction 11A.2 Feedback and its properties 11A.3 Properties that are feedback invariant 11A.4 A characterization of decoupling 11A.5 The main theorem 12 Modern China: A quick glance 12.1 Appearance and development of chinese central bank 12.1.1 A brief history 12.1.2 Hierarchy of Chinese central bank 12.1.3 Business of the people's bank of China 12.1.4 Money supply of China 12.2 Chinese financial system 12.2.1 Chinese banks 12.2.2 Other financial organizations 12.2.3 Business of lending and investing 12.2.4 Other banking businesses 12.3 Financial reforms of China 12.3.1 Need for reform 12.3.2 Key aspects of financial reform 12.4 International reserves of China 12.4.1 Fast increase in foreign reserves 12.4.2 Management of foreign reserves 515 12.4.3 How can the risk of US$3,442.65 billion reserves be resolved? 12.5 Understanding China culturally 12.5.1 What is China as a civilization? 12.5.2 How will China revive through adopting beneficial elements 12.5.3 What kind of democracy would China potentially embrace? 12.5.4 External pressures China currently experiences 12.5.5 Will China be peaceful with neighboring economies? 12.6 Will economic prosperity visit China soon?

Product Details

  • publication date: 03/03/2014
  • ISBN13: 9781138026285
  • Format: Hardback
  • Number Of Pages: 570
  • ID: 9781138026285
  • weight: 1360
  • ISBN10: 113802628X

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