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A monetary Minsky model of the Great Moderation and the Great Recession

  • Keen, Steve

Steve Keen's model of Minsky's Financial Instability Hypothesis (Keen, 1995) displayed qualitative characteristics that matched the real macroeconomic and income-distributional outcomes of the preceding and subsequent fifteen years: a period of economic volatility followed by a period of moderation, leading to a rise of instability once more and a serious economic crisis. This paper extends that model to build a strictly monetary macroeconomic model which can generate the monetary as well as the real phenomena manifested by both The Great Recession and The Great Moderation.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 86 (2013)
Issue (Month): C ()
Pages: 221-235

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Handle: RePEc:eee:jeborg:v:86:y:2013:i:c:p:221-235
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  1. Wright, Randall, 2010. "A uniqueness proof for monetary steady state," Journal of Economic Theory, Elsevier, vol. 145(1), pages 382-391, January.
  2. Minsky, Hyman P, 1971. "The Allocation of Social Risk: Discussion," American Economic Review, American Economic Association, vol. 61(2), pages 389-90, May.
  3. Jordi Gali & Luca Gambetti, 2008. "On the Sources of the Great Moderation," NBER Working Papers 14171, National Bureau of Economic Research, Inc.
  4. Keen, Steve, 2010. "Solving the paradox of monetary profits," Economics Discussion Papers 2010-2, Kiel Institute for the World Economy.
  5. Arnab Bhattacharjee & Christoph Thoenissen, 2007. "Money And Monetary Policy In Dynamic Stochastic General Equilibrium Models," Manchester School, University of Manchester, vol. 75(s1), pages 88-122, 09.
  6. Basil J. Moore, 1983. "Unpacking the Post Keynesian Black Box: Bank Lending and the Money Supply," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 5(4), pages 537-556, July.
  7. Benati, Luca & Surico, Paolo, 2008. "VAR analysis and the Great Moderation," Working Paper Series 0866, European Central Bank.
  8. Magill, M. & Quinzii, M., 1988. "Real Effects Of Money In General Equilibrium," Papers 8826, Southern California - Department of Economics.
  9. Steven J. Davis & James A. Kahn, 2008. "Interpreting the Great Moderation: changes in the volatility of economic activity at the macro and micro Levels," Staff Reports 334, Federal Reserve Bank of New York.
  10. Bezemer, Dirk J, 2009. "“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models," MPRA Paper 15892, University Library of Munich, Germany.
  11. Riccardo Bellofiore & Guglielmo Forges Davanzati & Riccardo Realfonzo, 2000. "Marx Inside the Circuit: Discipline device, wage bargaining and unemployment in a sequential monetary economy," Review of Political Economy, Taylor & Francis Journals, vol. 12(4), pages 403-417.
  12. Steve Keen, 1995. "Finance and Economic Breakdown: Modeling Minsky's "Financial Instability Hypothesis"," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 17(4), pages 607-635, July.
  13. Pedro Gutierrez, 2004. "Money, prices and interest rates in a non-aggregate stochastic general equilibrium model," Applied Mathematical Finance, Taylor & Francis Journals, vol. 11(4), pages 283-316.
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  15. Finn E. Kydland & Edward C. Prescott, 1990. "Business cycles: real facts and a monetary myth," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 3-18.
  16. Bezemer, Dirk J., 2010. "Understanding financial crisis through accounting models," Accounting, Organizations and Society, Elsevier, vol. 35(7), pages 676-688, October.
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  18. Basil J. Moore, 1988. "The Endogenous Money Supply," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 10(3), pages 372-385, April.
  19. Basil J. Moore, 1979. "The Endogenous Money Stock," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 2(1), pages 49-70, October.
  20. Godley, Wynne, 1999. "Money and Credit in a Keynesian Model of Income Determination," Cambridge Journal of Economics, Oxford University Press, vol. 23(4), pages 393-411, July.
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