... contagion. But the centralityof the issue has to do with a deeper reason, that is, the understanding of the crucial role thatfinance plays for the functioning of market monetary economies of production. ... thefunctional separation that the theory operates between banks and firms .The macroeconomic focus of the theory, however, leaves the essential microeconomicaspects of finance out of the picture. In particular, ... institutions on the basisof the implicit guarantee of (perceived) unlimited solvency of the public sector. Also, the largeshare of public spending on aggregate output stabilizes the flow of funds that...