Minsky cycles in Keynesian models of growth and distribution

Ryoo, Soon

doi:10.4337/roke.2013.01.03

Cited by 33 publications

(45 citation statements)

References 29 publications

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“…The Minskyian stream within postKeynesian economics has long emphasised the role of asset prices in borrowing (and lending). In these models (Ryoo 2013), optimistic investors will drive up asset prices during boom phases, lowering corporate financing costs and thus encouraging businesses to take on more debt. However, Minsky's original writings analysed businesses and their debt rather than households and mortgage debt.…”

Section: The Theoretical Frameworkmentioning

confidence: 99%

“…Minsky (1995) regarded debt cycles as the driver of economic fluctuations. Recently there have been several attempts to formalise his model (Charles 2008;Fazzari et al 2008;Keen 1995;Ryoo 2013). There is a surge in interest in stock-flow consistent (SFC) models (Godley and Lavoie 2007), which highlight the impact of stock variables such as debt and net wealth on macroeconomic aggregates.…”

Section: Introductionmentioning

confidence: 99%

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Debt-driven growth? Wealth, distribution and demand in OECD countries

Stockhammer

Wildauer

2015

CAMECO

110

112

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The paper investigates the effects of changes in the distribution of income and in wealth on aggregate demand and its components. We extend the Bhaduri and Marglin (1990) model to include personal income inequality as well as asset prices and debt. This allows for an evaluation of the wage or profit-led nature of demand regimes, of the expenditure cascade argument (Frank et al. 2010) and several hypotheses regarding the effects of wealth and debt. Our estimates are based on a panel of 18 OECD countries covering the period 1980-2013. For the full panel the average demand regime is found to be wage led. We fail to find effects of personal inequality, but do find strong effects of debt and property prices which have been the major drivers of aggregate demand in the decade prior to the 2007 crisis.

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Section: The Theoretical Frameworkmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Debt-driven growth? Wealth, distribution and demand in OECD countries

Stockhammer

Wildauer

2015

CAMECO

110

112

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“…Minsky models have at their core a financial cycle that operates either through the indebtedness of business or households or, in some versions, an asset price cycle. Most of the research on these models so far is theoretical (Keen 1995;Asada 2001;Charles 2008;Fazzari et al 2008;Ryoo 2013). There are few empirical tests of these models yet, and the relation to the Kaleckian literature is not usually made explicit, despite Minsky's own building on Kalecki and the sympathy of most Minskyans.…”

Section: The Relative Size Of Distributional and Financial Effectsmentioning

confidence: 99%

Untitled

2017

ROKE

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The Bhaduri-Marglin model has become a widely used workhorse model in heterodox macroeconomics and has given rise to two dozen or so empirical studies, which at times have given conflicting results. Neo-Kaleckians and neo-Goodwinians have applied different estimation strategies, with the former typically estimating behavioural equations, while the latter have often used reduced-form demand equations. Further differences include the lag structure, the output measure, the control variables and the sample. This paper, first, tries to clarify the terms of the debate. While neo-Kaleckians interpret the model as a mediumterm, partial-equilibrium goods market model, neo-Goodwinians are interested in the interaction of demand and distribution and regard the model as a long-run model with short-run cycles. Second, we elaborate a Kaleckian-Minskyan view of the economy as characterised by a wage-led demand regime and cycles driven by financial fragility. Many of the reported results may suffer from omitted variable bias as they do not include financial control variables. At least in the recent past, financial effects on demand have been much larger in size than distribution effects. A wage-led Minsky model with a reserve-army distribution function gives rise to pseudo-Goodwin cycles.

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“…In this paper, B P d is deemed constant 9 For a similar formulation that focuses on the endogeneity of the desired margins of safety of firms and banks see Nikolaidi (2014). 10 For recent Minskyan models that incorporate explicitly this role see Ryoo (2010Ryoo ( , 2013a, Di Guilmi (2011) andPassarella (2012 In our model the dynamic behaviour of g is determined by fiscal rules. Fiscal rules have been widely adopted over the past two decades or so.…”

Section:  mentioning

confidence: 99%

Debt Cycles, Instability and Fiscal Rules: A Godley-Minsky Model

Dafermos

2015

SSRN Journal

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Minsky cycles in Keynesian models of growth and distribution

Cited by 33 publications

References 29 publications

Debt-driven growth? Wealth, distribution and demand in OECD countries

Debt-driven growth? Wealth, distribution and demand in OECD countries

Untitled

Debt Cycles, Instability and Fiscal Rules: A Godley-Minsky Model

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