Policy Goals Research Articles

J. Biden’s First Term: Renaissance of U.S. Public Diplomacy?

Since the end of Cold War, U.S. public diplomacy (PD) has displayed signs of a systemic crisis, largely due to a lack of political will to regard PD as one of the key foreign policy instruments. At the beginning of J. Biden’s presidency, it seemed likely that under his administration American PD would finally undergo significant modernization. Indeed, during the period from 2021 to 2024, there have been numerous changes within U.S. PD. The author analyzes the most prominent changes using principles of historic approach, systemic approach, as well as structural-functional approach. The article classifies these changes into three categories: institutional reforms, practical reforms, and methodological reforms. Reforms from the first category aim to optimize the organization of PD institutions and improve staff qualifications. Those from the second category focus on revision of the old practical methods and development of the new ones. The third category is defined by scientific analysis of the current U.S. PD system, its target audiences as well as the possible ways PD can be used to advance American foreign policy goals. All indicators discovered through the research conducted for this article suggest that J. Biden’s presidency has indeed become a starting point for major modernization of the U.S. PD and its re-emergence as one of the key foreign policy instruments.

Centrifugal Processes and Divisions as a Megatrend of Crisis Geopolitics

The world has entered an acute phase of a protracted macrocrisis, one of the most striking manifestations of which is the processes of disengagement in global politics. The logic of confrontation inevitably aggravates old conflicts and reproduces new ones. The centrifugal dynamics received an explosive impetus because of directly interconnected process of internationalisation of the Ukrainian crisis and “Ukrainisation” of the Western-centric agenda. Conflict motives of local, regional, geopolitical divides, and gaps are acquiring increasing practical and political significance. The logic of asymmetrical, multidirectional interactions in global politics is rapidly gaining momentum. The previously inertial confrontation between the United States and Russia, the United States and China has moved into the acute phase of a dangerous confrontation. The potential for resolving the most important geopolitical and military-strategic problems in their relations has been reduced by US efforts to a critical minimum. A focused reflection of geopolitical divisions has become the sophisticated construction of a new Iron Curtain around Russia by the united West. The world is actually divided into the World Majority, whose countries take a neutral or favorable position towards Russia, and a non-structurally formalised coalition of countries led by the United States, guided by American foreign policy goals and priorities. Lines of demarcation and fragmentation run across a variety of spheres and formats, regional and geopolitical areas, erecting new boundaries and barriers in interstate cooperation and creating a dangerous tilt and distortions in strategic security. In the context of the chaotisation of world politics and the rapid development of centrifugal processes of geopolitical and geo-economic demarcations and confrontations, the asymmetry of approaches to the prospects for reformatting the world order is becoming increasingly visible.

To the issue of regional specialization and stimulation of investment activity in the context of ensuring economic security

Relevance. Ensuring the economic security of the Russian Federation as a strategic goal of state policy to achieve national priorities creates conditions for high rates of economic growth and improving the quality of life of the population. In this aspect, it is necessary and appropriate to search for optimal and effective tools, ways and methods that contribute to the socio-economic development of regions, one of which is economic specialization, which allows to maximize the efficiency of using the available potential and competitive advantages.The purpose of the study is to substantiate the effectiveness of industrial-agricultural specialization of the region in order to ensure economic security by conducting a comparative assessment of the dynamics of development of the CFA regions with different types of economic specialization for 2017-2021.Objectives: to consider theoretical aspects of economic specialization of regions, to analyze the structure of gross regional product of the CFD regions, grouping by type of specialization, to assess the dynamics of growth indices of gross regional product, investment in fixed capital, average per capita cash income of the population for 2017-2021.Methodology. Within the framework of the conducted research the authors use general scientific methods: scientific abstraction, analysis and synthesis, generalization of scientific practice, deduction, induction, economic and statistical analysis, comparison, summary, grouping.Results. The conducted research allowed to form and highlight the following scientific results: to substantiate the effectiveness of industrial-agricultural specialization in order to ensure economic security, to formulate the conditions necessary for the transition to industrial-agricultural specialization, to identify the advantages of this type of specialization over others.Conclusions. Regions with industrial-agricultural specialization are characterized by higher growth rates of gross regional product, investment in fixed capital and average per capita income of the population. Also, the regions with industrial-agricultural specialization retain positive dynamics of development in crisis conditions: it is the regions with this specialization that demonstrated positive dynamics in the growth of gross regional product and investment in fixed capital at the end of 2020.

Small States Big Conflicts: Strategic Analysis of Qatar’s Conflict Resolution Initiatives

The foreign policies of small states in the GCC are increasingly linked to key roles in conflict resolution processes regionally and beyond. By emerging as mediators the leadership of such states also powerfully address and remain relevant to the wider diplomatic processes that pushes them close to forms of indispensability. In so doing such countries strengthen bilateral relationships with bigger states that in reality are fundamental to meeting the existential demands of state survival and national interest. Further, such countries can begin to gain attributes of reliability and responsiveness that permit them an outsized role on the global stage. This article takes the case of Qatar, to undertake analysis of its conflict resolution initiatives, principally mediation. It does so, as they relate to specifically constitutional commitments, the preservation of shelter relationships with bigger states and foreign policy goals in complex and enduring conflict environments.

The Hard Pursuit of Optimal Vaccination Compliance in Heterogeneous Populations

Abstract The present model focuses on how people decide to get vaccinated, based on their beliefs and costs and on the public information concerning the disease severity, that in turn depends on the vaccination coverage. This interplay between beliefs and outcomes gives rise to a dynamical learning process, whose steady state is a self-fulfilling equilibrium. Although equilibrium levels of immunization and disease severity do not depend on beliefs, even in equilibrium heterogeneous people interpret the severity/coverage relation in different ways. These differences, together with the structural parameters of the model, have important implications for the stability of the equilibrium, finally impinging on the efficacy of policies aimed at correcting the existing state. In fact, we find that when the equilibrium disease severity is too high and immunization is suboptimal, mandatory vaccination and nudging can be valid options for fighting vaccination hesitancy (while moral suasion looks less effective); in addition, some policy mixes turn out to be very effective. However, given the interaction between beliefs, learning, and policies, the wished policy goal cannot be achieved immediately with precision, due to possible instability of equilibria. This supports the idea that immunization must be encouraged by using mixes of persistent policies.

A regulatory gap analysis in transportation cybersecurity and data privacy

AbstractAlthough the need for regulatory and enforcement measures is dire, there is no all‐encompassing federal law or regulatory framework that governs cybersecurity or data privacy in the US transportation industry. The objective of this paper is to analyze the gaps that exist in US cybersecurity regulatory schematic as applied to transportation law and policy. As opposed to a theoretical approach, this study relies on a systematic gap analysis methodology to canvas a broad topic and distill specific insights that can be used as a foundation for establishing legislative and policy goals. Specifically, this paper attempts to answer: (i) what federal and/or state agencies are responsible for governing cybersecurity practices in the United States, including risk assessment, preventative measures, detection of breaches, and remedial enforcement; and (ii) how do industry experts assess the greatest risks/threats to ensuring cybersecurity in the transportation sector? The scope of selected legislative analysis is purposefully all‐encompassing of the transportation industry to highlight the scant nature of existing US law on the subject. Several states have enacted their own cybersecurity legislation, creating an unsynchronized approach nationwide that implicates jurisdictional issues, preemption problems, and inconsistent compliance requirements for national stakeholders. This paper next considers states' perspectives of transportation cybersecurity as assessed through a national survey of US state transportation agencies. Specific areas of concern identified as being important to the transportation industry but largely overlooked in the legislative spectrum include issues related to third‐party vendor liability, identifying cybersecurity tools, and supply chain risk management. Legislation covering workforce, ransomware, and cybersecurity‐related privacy issues saw more success, but low passage rates were still reflected with respect to the number of bills proposed. On the other hand, funding, insurance, and penalization issues appeared to be frequently prioritized. This paper presents the results of a gap analysis research approach identifying discrepancies between “what is” and “what should be” in transportation cybersecurity legislation.

State-owned equity participation and greenwashing behavior: evidence from Chinese private enterprises

PurposeCan state-owned equity participation inhibit private enterprises’ greenwashing behavior? If so, what are the mechanisms involved? Is there any difference in the impact of state-owned equity participation on private enterprises’ greenwashing behavior in different contexts? The answers to the above questions not only fill the existing research gaps but also provide new research ideas for greenwashing governance in developing countries.Design/methodology/approachUsing a sample of Chinese A-share listed private enterprises from 2011 to 2022, we examine the impact of state-owned equity participation on private enterprises’ greenwashing behavior.FindingsThe results suggest that state-owned equity participation can significantly inhibit private enterprises’ greenwashing behavior. Mechanism analysis shows that state-owned equity participation suppresses private enterprises’ greenwashing behavior by alleviating financing constraints through the resource effect and reducing managerial myopia through the governance effect. Moderating effect analysis indicates that media attention can strengthen the inhibitory effect of state-owned equity participation on private enterprises’ greenwashing behavior. Heterogeneity analysis shows that the inhibitory effect of state-owned equity participation on private enterprises’ greenwashing behavior is more significant in areas with a low degree of marketization and non-heavy-polluting industries.Originality/valueThe findings enrich the governance factors of private enterprises’ greenwashing conduct from the standpoint of diverse shareholders, assist developing countries in formulating more specific policy goals and provide important insights into global environmental governance practices.

Growing mismatches of supply and demand of ecosystem services in the Netherlands

A sufficient supply of goods and services from ecosystems is vital to ensure human well-being. This study evaluates whether the demand for goods and services within the Netherlands is met by Dutch ecosystems, could otherwise be provided through technology and/or by imports, or remains (partially) unmet. Additionally, this study shows the dynamics of supply and demand of these services over time. The results reveal that no ecosystem service supply is fully meeting the total demand provided by Dutch ecosystems. Additionally, for the majority of the services (10 out of 17), the gap between supply and demand widened over the last two decades, indicating a growing mismatch. Imports and technology only partly close the gap between supply and demand. The growing mismatch between supply and demand is expected to lead to increasing negative impacts on human well-being, such as poor air and water quality, heat stress in urban areas, increasing flood risks, limiting opportunities for outdoor recreation and loss of biodiversity. Our findings show that current policy goals to maintain and restore ecosystem services are not on track in the Netherlands. Urgent action is necessary to enhance the sustainable utilization of natural resources and to optimize the balance between supply and demand. Priority should be given to goods and services facing unmet demand where imports or technological solutions are not feasible, particularly those where the gap between supply and demand is widening.

What rural ecological governance goals do local residents prefer? Evidence from Hainan, China

Rural ecosystems restoration requires the joint participation of rural residents and government in governance. This study aims to analyze whether rural ecological governance goals are consistent with rural residents' preferences and how they affect rural residents' utility levels, which are key to rural residents' ecological governance participation behavior. Using survey data from 653 rural residents in Hainan Island, China, this paper applies a choice experiment method and a random parameter logit model to identify differences in rural residents' preferences for different rural ecological governance policy goals and their governance participation behaviors. The results show that increasing the coverage rate of sewage treatment facilities, reducing fertilizer and pesticide application, and increasing rural biodiversity can significantly enhance rural residents' ecological governance participation utility, thereby promoting their choice of ecological governance options. Rural residents' participation behavior in rural ecological governance is also influenced by individual and household characteristics such as ethnicity, labor size, net farm income, ICT usage, and ecological knowledge level. Based on these findings, policymakers should strengthen communication of governance policies and objectives, respect rural residents' policy goal preferences, prioritize the implementation of rural ecological governance models that increase the coverage of wastewater treatment facilities, reduce fertilizer and pesticide application, and increase rural biodiversity, and rely on ICT devices to popularize ecological knowledge among rural residents.

Reforming the Stability and Growth Pact: Debt reduction versus sustainable and inclusive growth

The reformed EU fiscal rules (also referred to as Stability and Growth Pact) entered into force in April 2024. The main objectives of the reform were to ensure sound and sustainable public finances, while promoting sustainable and inclusive growth in all Member States through reforms and investments. This article provides an overview of the new legal framework and examines the relation and balance between debt reduction and sustainable growth in the application of the revised framework. It also analyses the Commission’s discretion in balancing these policy goals, first when assessing Member States’ fiscal-structural plans and second, when recommending the opening of an excessive deficit procedure. Further, this article examines the latest revision of the fiscal rules in the broader context of the EU’s legal competence in the field of economic policy, also taking into account other recent initiatives, such as NextGenerationEU and REPowerEU.

International Council of Nurses 2025 Congress: Nursing power to change the world.

The International Council of Nurses (ICN) 2025 Congress, themed "Nursing Power to Change the World," will convene in Helsinki, Finland, from 9 to 13 June 2025. This landmark event celebrates a century of nursing progress and addresses contemporary challenges in healthcare. The Congress emphasises the pivotal role of nurses in enhancing healthcare equity, accessibility, and outcomes, aligning with global health policy goals such as Universal Health Coverage (UHC). It will feature contributions from key international organisations like the WHO and the International Committee of the Red Cross, highlighting the event's global significance. With over 10000 abstract submissions, the Congress promises a rich scientific programme, fostering knowledge exchange and professional development. Subthemes will explore nursing leadership, healthcare quality, education and the impact of transformative technologies. The Congress will also focus on advocacy, providing a platform for policy discussions on pressing global health issues. Networking opportunities will connect nurses with peers and leaders, promoting collaboration and career advancement. The inclusion of nursing students and early-career professionals underscores the commitment to nurturing the next generation of nurses. The ICN 2025 Congress is a call to action for nurses worldwide to lead transformative change in healthcare, ensuring the profession remains dynamic and influential. Join us in Helsinki to celebrate the power of nursing and explore the many ways in which nurses can lead the change in advancing global health.

정책집행이론에 근거한 직업계고 학점제 진단 - 마이스터고 학점제 담당자 인식을 중심으로

Purpose: This study was conducted to analyze the level of policy awareness among vocational high school credit system policy implementers and derive improvement measures. Methods: This study utilized survey data on policy perceptions of the high school credit system from forty-four head teachers at Meister High Schools, supplemented by in-depth telephone interviews with five participants to explore the reasons behind the survey results. The data were analyzed using statistical methods such as descriptive statistics, t-tests, Borich needs assessment, and Importance Performance Analysis (IPA) with the help of SPSS 23.0 software. Results: The analysis of the perception of vocational high school credit system administrators revealed that in the policy goal factors, perception of the policy-making process emerged as the most urgently needed factor for improvement. In executing agency factors, perception of member capabilities emerged as the most urgently needed factor for improvement. In execution management factors, perception of performance goals emerged as the most urgently needed factor for improvement. In policy environment factors, perception of interest and support emerged as the most urgently needed factor for improvement. Conclusion: To enhance the effectiveness of the credit system in vocational high schools, it is necessary to improve the efficiency of tasks related to the credit system, implement a more flexible curriculum, and increase students' understanding and interest in the credit system policies.

사회정책과정 단계별 관련 괘의 사회정책적 해석과 정책적 과제

The purpose of this study is to interpret the social policy situation of the relevant hexagrams of the stages in social policy process from the standpoint of the social policy by using the framework which is sought through modifying and supplementing the existing framework and to identify its policy tasks. The policy tasks of the revevant hexagrams related to each stages in social policy process identified through this study can be summarized as follows. First, the policy task of hexagram in the social problem forming stage is to seek new approach or theoretical perspective on social problems Second, the policy task of hexagram in the social policy agenda forming stage is about which of the various social policy agenda forming factors should be prioritized and applied. Third, the policy task of the hexagrm in social policy decision-making stage is about what should be reflected as the core content when setting social policy goals. Fourth, the policy task of hexagram in social policy implementing stage is that communication between persons concerned social policy should be emphasized in order to achieve social policy goals. Fifth. The policy task of hexagram in the social policy evaluating stage is that among the various types of policy evaluation, performance evaluation or program evaluation should be given the highest priority. The policy tasks of of relevant hexagrams in the stages in social policy process through interpreting the social policy situation from the standpoint of social policy have been identified. If so, it can be said that The Book of Change is a human heritage that should be used in various ways in the field of social welfare and social policy.

Technology-integrated sustainable supply chains: Balancing domestic policy goals, global stability, and economic growth

In a dispensation defined by globalization and rapid technological advancements, sustainable supply chains have emerged as pivotal mechanisms for addressing the many-sided challenges encompassing economic growth, environmental sustainability, and policy alignment. This article looks into the transformative role of technology-integrated supply chains, exploring how innovations such as artificial intelligence [AI], blockchain, and the Internet of Things [IoT] enhance resilience, foster economic prosperity, and bridge gaps in global trade. By integrating advanced technologies, supply chains can optimize resource efficiency, mitigate risks, and contribute to national security and stability. The study examines the interplay between domestic policy goals and global stability, highlighting the critical role of sustainable supply chains in aligning with foreign policy objectives and driving long-term economic resilience. Through the lens of machine learning methodologies, including Support Vector Machines [SVMs], the article analyses real-world data to demonstrate the effectiveness of technology-driven innovations in addressing supply chain inefficiencies. Key findings underscore how such innovations enable supply chains to adapt to dynamic market demands while ensuring environmental stewardship and public health outcomes. Moreover, the article identifies challenges in implementing advanced supply chain solutions, such as data limitations, technological adoption barriers, and scalability constraints. By offering strategic insights and a framework for policymakers, industries, and researchers, this work emphasizes the necessity of balancing sustainability with economic imperatives. It concludes with recommendations for leveraging cutting-edge technologies to design resilient and sustainable supply chains that harmonize global trade, policy objectives, and environmental priorities, paving the way for inclusive and equitable economic growth.

Strengthening the governance of food systems for nutrition in Africa: a political economy analysis of food policy in South Africa and Ghana.

To examine underlying political economy factors that enable or impede the integration of nutrition considerations into food system governance. Comparative political economy analysis of data collected through (1) value chain analyses of selected healthy and unhealthy commodities and (2) food system policy analyses, using a theoretical framework focused on power, politics, interests and ideas. Ghana and South Africa. Value chain actors relevant to healthy and unhealthy foods (Ghana n 121; South Africa n 72) and policy stakeholders from government (Health, Agriculture, Trade and Industry, Finance), academia, civil society, development partners, Civil Society Organization (CSO) and private sector (Ghana n 28; South Africa n 48). Nutrition was a stated policy priority in both countries; however, policy responsibility was located within the health sector, with limited integration of nutrition into food system sectors (including Agriculture, Trade and Industry). Contributing factors included a conceptions of policy responsibilities for nutrition and food systems, dominant ideas and narratives regarding the economic role of the food industry and the purpose of food system policy, the influence of large food industry actors, and limited institutional structures for cross-sectoral engagement and coordination. Integrating nutrition into multi-sectoral food policy to achieve multiple food system policy goals will require strategic action across jurisdictions and regional levels. Opportunities included increasing investment in healthy traditional foods, strengthening urban/rural linkages and informal food systems, and strengthening institutional structures for policy coherence and coordination related to nutrition.

Promotion of the 2022 Olympic Winter Games on Chinese and Western social media

PurposeThe 2022 Olympic Winter Games in Beijing were the first sporting mega-event held in a country that limits access to popular Western social networks. Since both domestic and international audiences were crucial for the organizers, the purpose of this study was to identify similarities and differences in content published and engagement generated on the event’s official social media accounts in the months preceding the Olympics.Design/methodology/approachFor 1,200 consecutive original posts published on Facebook, Sina Weibo and Twitter, we coded the time of publication, motivation targeted by the message according to Raney’s typology of motivations for sport spectatorship, multimedia additions and number of likes/reactions, comments and shares.FindingsAll accounts were dominated by posts targeting cognitive motivations. The Weibo profile was much more active and followed. There, 71.5% of content conveyed learning, while the most engaging content provided entertainment. Content on Western networks was more varied but virtually duplicated across networks. The most engaging posts targeted euphoric stress, escape and aesthetic pleasure. Comparable content elicited different engagement on Chinese and Western social media. Graphics and video were the most engaging features on all networks; polls were the least engaging.Research limitations/implicationsAgenda-setting effects of social media content differ across cultures and are co-created by user comments.Originality/valueTo the best of the authors’ knowledge, this is the first cross-cultural comparison of pre-event social media promotion by non-Western sporting mega-event hosts. Organizers diversified content strategies to cater to different audiences and pursue different policy goals. We proved cultural differences in content preference and engagement and showed the relevance of Raney’s typology of sport spectatorship for social media.

Evaluating Dietary Red Lentil Screenings on Performance, Antioxidant Status, Caecal Environment, and Intestinal Morphometric Features in Rabbits

Among the goals of global environmental policies, one is to achieve a critical rethinking of the agro-industrial production chain aimed at enhancing its sustainability and resilience while addressing its environmental impact. Lentils are widespread worldwide and are consumed as part of traditional dishes, and their health-promoting benefits are currently well recognized. Their industrial processing for human consumption implies the generation of different by-products which can be used as promising alternative feedstuff. Calling for the future sustainable development of rabbit farming, the present study questions the dietary inclusion of red lentil screenings (RLS) as an upcycling strategy for this by-product, as well as to ease the challenges faced by the rabbit-farming system. A total of 120 male Bianca Italiana breed growing rabbits aged 42 days were allotted to three dietary treatments containing different levels of RLS: 0 (RLS0), 5 (RLS5), or 10% (RLS10), respectively, for 6 weeks. At 84 days (slaughter age), meat, plasma, and intestinal samples were collected. The RLS inclusion showed no adverse effects on growth performance. However, significant differences were found in the meat fatty acid profile, where both RLS5 and RLS10 groups showed reduced C18:0 percentage and higher MUFA content owing to an increase in C18:1 n-9; moreover, RLS5 showed a significant increase in C16:1 trans. On the other hand, only RLS10 recorded a significant reduction in the PUFA total content due to decreased single unsaturated fatty acid (C18:2 n-6; C20:3 n-6; C22:5 n-3). Dietary RLS significantly decreased serum total cholesterol, LDL, and HDL, along with an enhancement of the overall serum antioxidant capacity. The results regarding the rabbit caecal characteristics and microbial population were found to be similar among the groups. However, referring to histomorphometric measurements, both RLS5 and RLS10 groups displayed significant increases in villus height and an improved villus height to crypt depth ratio. In conclusion, up to 10% RLS in the diets rabbits can be considered an effort-effective feeding strategy to modulate rabbit meat fatty acid profiles, to enhance the endogenous antioxidant capacity, and to improve the serum lipid profile and intestinal morphology.

North Korea in the Twilight of Communism: Ideological Transformation and International Relations during the Cold War's Final Decade

Abstract The 1980s were a time of considerable ideological transformations in North Korea and the Soviet Union. North Korean leaders revived orthodox Marxism-Leninism, whereas the opposite was true in the Soviet Union, as Mikhail Gorbachev ushered in a fundamental reassessment of Marxism-Leninism that led to the downfall of ideological orthodoxy. Previous scholarship has barely explored this revival and the impact of Soviet ideological changes on North Korea. Drawing on newly released archival evidence and North Korean party publications, this article explores these interrelated and often contradictory phenomena. North Korea's revival of Marxism-Leninism, far from being superficial, was profound and strategically designed to link North Korean foreign policy much more closely with state ideology. The reoriented North Korean policy actively reached out to the Communist world to attain economic and diplomatic superiority vis-à-vis South Korea. Soviet ideological changes under Gorbachev threatened to undermine the DPRK's foreign policy goals and new ideological commitments, thus resulting in sharp ideological disagreements and ultimately the end of North Korea's Marxist-Leninist renaissance.

Male lone wolves and sociable females – Preferences for shared and AV transport services

This paper examines preferences for future transports, focusing specifically on shared transports and autonomous vehicles, in a national context. A choice experiment approach is applied in which respondents are asked to choose between individual and shared transport services, each associated with different attribute levels (driver/autonomous, waiting and travel times, and costs) for a trip to go grocery shopping. Data are analysed by applying latent class modelling, which facilitates the analysis of heterogeneity in preferences for the attributes across different groups in the sample. The results reveal three groups with considerable heterogeneity in preferences: the group accepting trade-offs, the lone-wolves, and the sociable. The trade-off group do not want to share transport, but are positive towards autonomous vehicles, and make trade-offs between these characteristics and costs. The members in the lone-wolves group are only concerned about not travelling in a shared transport. Members in the smallest sociable group are positive about sharing transports but reject autonomous vehicles. Women are overrepresented in the sociable group, as are people with environmental concern and those who lack a driver's licence. Overall, we find that a majority of the sample does not want to share transport services, which potentially constitutes a major challenge for policy makers regarding reaching environmental transport policy goals.

Interest-bearing capital and monetary policy: a heterogeneous agent Marxian model

PurposeIn terms of understanding the new issues emerging in the practice of monetary policies and how to evaluate the latest theories of monetary policy, this paper proposes referring to Das Kapital and developing a monetary policy theory grounded in Marxist political economy.Design/methodology/approachBased on the discussion of interest-bearing capital in Das Kapital and using a heterogeneous agent model, this paper tries to explain the determining mechanism of interest rate, leverage ratio, and asset price.FindingsThe research finds that if there are differences in the techniques possessed by capital, the resulting disparities in production efficiency will lead to differences in profit rates and further influence the functional choices of capital in the movement of social total capital. Thus, with the formation of lending relationships, interest rates, leverage ratios, and asset prices will be endogenously determined simultaneously. Moreover, as the degree of technological diffusion influences the industrial capitalists’ willingness to take loans as well as the level of profit rates, there may be counter-cyclical changes in the returns on productive investment and financial investment at different stages of the technology life cycle, contributing to diverting funds out of the real economy. Besides, this paper discusses the challenges, tools, and goals of monetary policy within the credit money system.Originality/valueClarify the intrinsic mechanism of the functional differentiation of capital determined by heterogeneous technologies and exogenous capital-labor relation and analyze the impact of capital differentiation on the economy.