Minsky cycles in Keynesian models of growth and distribution

Soon Ryoo

Review of Keynesian Economics, 2013, vol. 1, issue 1, 37-60

Abstract: his paper provides an alternative formalization of Minsky's theory of financial instability and examines the conditions under which perpetual cycles emerge from endogenous changes in financial practices. The main features of our model are found in its emphasis on (1) the interaction between debt and portfolio dynamics, (2) the importance of margins of safety in the evolution of firms' indebtedness, and (3) the decisive role of the dynamics of capital gains and expectations in asset markets. The general framework of financial instability is combined with two Keynesian models of growth and distribution (Kaleckian vs Kaldorian).

Keywords: Minsky cycles; financial instability; Kaleckian model; Kaldorian model (search for similar items in EconPapers)
JEL-codes: E12 E44 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (21)

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