This is the third and last volume of Martin Shubik's exposition of his vision of "mathematical institutional economics"—a term he coined in 1959 to describe the theoretical underpinnings needed
for the construction of an economic dynamics. The goal is to develop a process-oriented theory of money and financial institutions that reconciles micro- and macroeconomics, using strategic
market games and other game-theoretic methods.
There is as yet no general dynamic counterpart to the elegant and mathematically well-developed static theory of general equilibrium. Shubik's paradigm serves as an intermediate step between
general equilibrium and full dynamics. General equilibrium provides valuable insights on relationships in a closed friction-free economic structure. Shubik aims to open up this limited
structure to the rich environment of sociopolitical economy without dispensing with conceptual continuity.
Volume 1 of this work deals with a one-period approach to economic exchange with money, debt, and bankruptcy. Volume 2 explores the new economic features that arise when we consider multiperiod
finite and infinite horizon economies. Volume 3 considers the specific roles of financial institutions and government, aiming to provide the link between the abstract study of invariant
economic and financial functions and the ever-changing institutions that provide these functions. The concept of minimal financial institution is stressed as a means to connect function with
form in a parsimonious manner.
