Finale and Pasinetti’s Legacy

Mauro L. Baranzini and Amalia Mirante
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Mauro L. Baranzini: University of Lugano
Amalia Mirante: University of Applied Sciences of Southern Switzerland and University of Lugano

Chapter 11 in Luigi L. Pasinetti: An Intellectual Biography, 2018, pp 297-315 from Palgrave Macmillan

Abstract: Abstract Baranzini and Mirante first report on Pasinetti’s article ‘A Few Counterfactual Hypotheses on the Current Economic Crisis’, where he underlines the relevance of the second Cambridge controversy on income distribution in explaining the financial crises started in 2008. This controversy between the two Cambridges brought to fame the Modigliani-Miller Theorem and deeply influenced modern corporate finance. The wide acceptance of this theorem is, for Pasinetti, partly responsible for the present financial crisis. The authors conclude that thanks to Pasinetti’s original approach, a number of empirical rules and theoretical frameworks, often incompatible with traditional theories, were more satisfactorily explained and understood. Pasinetti’s whole scientific life has been driven by the desire to provide new frameworks for the explanation of the mechanisms at the bases of modern economic systems.

Keywords: Modigliani-Miller Theorem; Baranzini; Counter-factual Hypothesis; Modern Corporate Finance; Present Financial Crisis (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pshchp:978-3-319-71072-3_11

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DOI: 10.1007/978-3-319-71072-3_11

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