2017
DOI: 10.1111/joes.12222
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Minsky Models: A Structured Survey

Abstract: Minsky's ideas have recently gained prominence in the mainstream as well as in the heterodox literature. However, there exists no agreement upon the formal presentation of Minsky's insights. The aim of this paper is to survey the literature and identify differences and similarities in the ways through which Minskyan ideas have been formalised. We distinguish between the models that focus on the dynamics of debt or interest, with no or a secondary role for asset prices, and the models in which asset prices play… Show more

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Cited by 67 publications
(30 citation statements)
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References 75 publications
(227 reference statements)
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“…While, as discussed in Appendix B , an aggregated version of the model incorporating the same non-linearities as the baseline unsurprisingly also gives rise to cycles, the major point is that even when firms' decisions do not take place at the aggregate level, their individual uncoordinated investment behaviour is still sufficiently correlated to give rise to smaller but regular cycles. Along with the series of papers by Chiarella and Di Guilmi cited above, the paper hence demonstrates the added value of a heterogeneous agent approach in Minsky models which, as noted by Nikolaidi and Stockhammer (2017) , is somewhat underdeveloped. Secondly, the general framework of the two-price model of capital investment as formalised here is quite flexible in that it allows for the incorporation of a range of behavioural assumptions through slight modifications to what is presented as the baseline model.…”
Section: Bank Depositsmentioning
confidence: 63%
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“…While, as discussed in Appendix B , an aggregated version of the model incorporating the same non-linearities as the baseline unsurprisingly also gives rise to cycles, the major point is that even when firms' decisions do not take place at the aggregate level, their individual uncoordinated investment behaviour is still sufficiently correlated to give rise to smaller but regular cycles. Along with the series of papers by Chiarella and Di Guilmi cited above, the paper hence demonstrates the added value of a heterogeneous agent approach in Minsky models which, as noted by Nikolaidi and Stockhammer (2017) , is somewhat underdeveloped. Secondly, the general framework of the two-price model of capital investment as formalised here is quite flexible in that it allows for the incorporation of a range of behavioural assumptions through slight modifications to what is presented as the baseline model.…”
Section: Bank Depositsmentioning
confidence: 63%
“…Overall, the above discussions demonstrate that the cycles produced by the present model are centrally driven by the financing decisions and investment strategies of firms which strongly depend on financing conditions and investors' expectations about yields, making it legitimate to call them 'Minsky cycles'. As emphasised in the introduction, none of the factors and mechanisms determining investment in the present model are new to the literature, but the discussion of the baseline simulation in my view shows that the investment dynamics generated are behaviourally richer than those produced by many of the more simplified and aggregative models discussed by Nikolaidi and Stockhammer (2017) . The cycles generated by the model presented in Fazzari et al (2008) are somewhat similar insofar as internal financing as an argument in the investment function and endogenous fluctuations in the interest rate play a key role, though the exact mechanisms are of course different (for instance, changes in the interest rate are driven by expected inflation in Fazzari et al, 2008 ), and their model differs from the present one in various other respects (e.g.…”
Section: Macroeconomic Dynamicsmentioning
confidence: 77%
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“…1 For a more detailed analysis of the differences between the Minsky models see Nikolaidi/Stockhammer (2017). 2 By making a distinction between corporate debt and household debt models, our categorisation excludes by definition the Minsky models that examine corporate and household debt in conjunction (e.g.…”
Section: The Classification Of Minsky Models Shown Inmentioning
confidence: 99%