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Financial Fragility, the Minskian Triad, and Economic Dynamics

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  • Piero Ferri
  • AnnaMaria Variato

Abstract

This paper emphasizes the relationship between financial fragility and economic dynamics. It uses the Minskian microeconomic categories based on the "triad: hedge, speculative, and Ponzi" finance and puts them into a macro perspective. In this environment, there can be a sharp distinction between solvent systems and crisis equilibria. This dichotomy can be analyzed by means of a regime-switching mechanism. The interaction between financial and real aspects is capable of generating persistent fluctuations that are the natural humus where behavior à la Ponzi can take place and financial instability phenomena are generated.

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  • Piero Ferri & AnnaMaria Variato, 2010. "Financial Fragility, the Minskian Triad, and Economic Dynamics," International Journal of Political Economy, Taylor & Francis Journals, vol. 39(2), pages 70-82.
    • Handle: RePEc:mes:ijpoec:v:39:y:2010:i:2:p:70-82
    DOI: 10.2753/IJP0891-1916390206
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    2. Kamil Fortuna & Janusz Szwabiński, 2025. "An unified framework for modeling credit cycles and systemic risk assessment," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 20(2), pages 519-546, April.

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