Debt and Macro Stability

Marc Jarsulic
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Marc Jarsulic: University of Notre Dame

Eastern Economic Journal, 1990, vol. 16, issue 2, 91-100

Abstract: A dynamic Keynes/Kalecki macro model with debt and capital accumulation is used to explore the issue of financial instability. It is argued that market systems may reasonably be described as having stable and unstable regions that coexist. The proximity of these regions can be taken as a measure of financial fragility. The degree of fragility is shown to depend on expectational, distributional, and interest-rate factors. Thus, ideas of H. Minsky are integrated with work that emphasizes the importance of profitability.

Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:16:y:1990:i:2:p:91-100

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