This essay is the third of three. The ﬁrst is nontechnical and in part autobiograhpical describing the evolution of my approach to developing a microeconomic theory of money and.ﬁnancial institutions. The second essay was devoted to a more formal sketch of a closed economic exchange system with no other externalities beyond money and markets. This essay builds on the existence of monetary exchange but also context, and active government with nonsymmetric information and many externaties indicate that the views of Keynes, Hayek and Schumpeter are all consistent with the next stages of complexity as the logic requires many diﬀerent arrays of institutions to provide the necessary economic functions and adjust to the variety of socio-economic contexts.
Shubik, Martin, "Three Essays on the Theory of Money and Financial Institutions Essay 3: The Economy with Innovation, Externalities and Context" (2017). Cowles Foundation Discussion Papers. 2530.