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Les Liaisons dangereuses: a Minskyan approach to the relation of credit and investment in Argentina during the 1990s

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  • Valeria Arza
  • Paula Español

Abstract

We classify firms according to their financial behaviour in the short term using a Minskyan taxonomy that classifies firms as Hedge, Speculative and Ponzi. We measure financial constraints across that taxonomy using panel-data for Argentina during 1992--2001. After controlling for profitability we find that firms with an oppressed financial structure in the short term had to rely on their internal funds for long-term investment. We interpret this finding from a Minskyan/Keynesian framework arguing that credit allocation followed conventional rules about the quality of borrowers and not necessarily about the quality of the project. Because of being a highly unstable country, Argentinean firms' quality is defined on a short-term basis. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Suggested Citation

  • Valeria Arza & Paula Español, 2008. "Les Liaisons dangereuses: a Minskyan approach to the relation of credit and investment in Argentina during the 1990s," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(5), pages 739-759, September.
    • Handle: RePEc:oup:cambje:v:32:y:2008:i:5:p:739-759
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    File URL: http://hdl.handle.net/10.1093/cje/ben007
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    Cited by:

    1. Engelbert Stockhammer & Giorgos Gouzoulis & Rob Calvert Jump, 2019. "Debt-driven business cycles in historical perspective: The cases of the USA (1889-2015) and UK (1882-2010)," Working Papers PKWP1907, Post Keynesian Economics Society (PKES).
    2. Engelbert Stockhammer & Giorgos Gouzoulis, 2023. "Debt-GDP cycles in historical perspective: the case of the USA (1889–2014)," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(2), pages 317-335.
    3. Juan Laborda & Vicente Salas & Cristina Suárez, 2021. "Financial constraints on R&D projects and minsky moments: containing the credit cycle," Journal of Evolutionary Economics, Springer, vol. 31(4), pages 1089-1111, September.

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