Introduction

This introductory chapter illustrates the main lines of the research on banks and finance in 20th-century macroeconomics carried out in the book. The authors argue that for a long time after the 1930s, banks and financial markets were largely ignored by mainstream macroeconomics. The absence of banks and finance from benchmark macroeconomic models until recent years is the question the book addresses from a historical and theoretical perspective. The chapter stresses the importance of bringing back banks and financial markets to macroeconomics in order to understand the world in which we live. Part I of the book is devoted to the period from the early years of the 20th century to the years immediately following World War II; Part II looks at the period between World War II and the early 21st century.