We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Macrodynamics of debt regimes, financial instability and growth.
- Authors
Lima, Gilberto Tadeu; Meirelles, Antonio J. A.
- Abstract
This paper develops a post-Keynesian dynamic model of capacity utilisation and growth, in which the supply of credit-money is endogenous and firms' debt position—and thus the financial fragility of the economy a la Hyman Minsky—is explicitly modelled. The interest rate is set by banks as a markup over a base rate exogenously determined by the monetary authority. The banking markup varies with changes in capacity utilisation, while the debt ratio varies with changes in the rates of interest, capital accumulation and growth. Regarding dynamics, it is shown the possibility of relating the stability properties of a system with the interest rate and the debt ratio as state variables to the prevailing Minskyan regime—hedge, speculative or Ponzi.
- Subjects
DEBT-to-equity ratio; DEMAND for money; INTEREST (Finance); BANKING industry; INTEREST rates; MINSKY, Hyman; MONETARY policy
- Publication
Cambridge Journal of Economics, 2007, Vol 31, Issue 4, p563
- ISSN
0309-166X
- Publication type
Article
- DOI
10.1093/cje/bel042