IDEAS home Printed from https://ideas.repec.org/a/spr/eaiere/v13y2016i1d10.1007_s40844-016-0029-2.html
   My bibliography  Save this article

Financial structure, financial instability, and inflation targeting

Author

Listed:
  • Kenshiro Ninomiya

    (Shiga University)

Abstract

Minsky, the first to propose the financial instability hypothesis, stressed the importance of the lender-of-last-resort for preventing financial instability. Overall, however, most of the research on financial instability has focused little on measures to prevent instability. Japan was trapped in a prolonged recession after the collapse of the bubble economy. The government promoted market-oriented economic reforms to cope. The recent international monetary crisis, triggered by the subprime loan crisis of 2007 in the US, cast a dark shadow over the world economy. Some developed nations, most notably New Zealand have been successful in implementing inflation-targeting policies. The Bank of Japan and the US Federal Reserve have adopted the inflation-targeting measures after the crisis. The main purpose of this paper is to examine financial instability, financial cycles, and the effects of inflation targeting in a mixed competitive–oligopolistic system. The results of this paper demonstrate that inflation targeting stabilizes an economy in both competitive and oligopolistic systems.

Suggested Citation

  • Kenshiro Ninomiya, 2016. "Financial structure, financial instability, and inflation targeting," Evolutionary and Institutional Economics Review, Springer, vol. 13(1), pages 23-36, June.
    • Handle: RePEc:spr:eaiere:v:13:y:2016:i:1:d:10.1007_s40844-016-0029-2
    DOI: 10.1007/s40844-016-0029-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40844-016-0029-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40844-016-0029-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fischer, Stanley, 1972. "Keynes-Wicksell and Neoclassical Models of Money and Growth," American Economic Review, American Economic Association, vol. 62(5), pages 880-890, December.
    2. Ryoo, Soon, 2010. "Long waves and short cycles in a model of endogenous financial fragility," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 163-186, June.
    3. Marc Lavoie, 2006. "A Post‐Keynesian Amendment To The New Consensus On Monetary Policy," Metroeconomica, Wiley Blackwell, vol. 57(2), pages 165-192, May.
    4. Rose, Hugh, 1969. "Real and Monetary Factors in the Business Cycle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(2), pages 138-152, May.
    5. Louis-Philippe Rochon & Mark Setterfield, 2007. "Interest rates, income distribution, and monetary policy dominance: Post Keynesians and the "fair rate" of interest," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 30(1), pages 13-42.
    6. Mark Setterfield, 2009. "Macroeconomics without the LM curve: an alternative view," Cambridge Journal of Economics, Oxford University Press, vol. 33(2), pages 273-293, March.
    7. Steve Keen, 1995. "Finance and Economic Breakdown: Modeling Minsky’s “Financial Instability Hypothesis”," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 17(4), pages 607-635, July.
    8. David H. Romer, 2000. "Keynesian Macroeconomics without the LM Curve," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 149-169, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kenshiro Ninomiya, 2022. "Financial structure, cycle, and instability," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-23, December.
    2. Kenshiro Ninomiya & Hiroyuki Takami, 2018. "Profit sharing, labour share and financial structure," Evolutionary and Institutional Economics Review, Springer, vol. 15(1), pages 89-111, June.
    3. Kenshiro Ninomiya, 2015. "Financial Structure, Cycle, and Instability," Discussion Papers CRR Discussion Paper Series B: Financial 15, Shiga University, Faculty of Economics,Center for Risk Research, revised Jan 2017.
    4. Kenshiro Ninomiya, 2017. "Financial Structure and Instability in an Open Economy," Discussion Papers CRR Discussion Paper Series B: Financial 16, Shiga University, Faculty of Economics,Center for Risk Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eckhard Hein & Christian Schoder, 2011. "Interest rates, distribution and capital accumulation -- A post-Kaleckian perspective on the US and Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(6), pages 693-723, November.
    2. Soon Ryoo & Peter Skott, 2017. "Fiscal and Monetary Policy Rules in an Unstable Economy," Metroeconomica, Wiley Blackwell, vol. 68(3), pages 500-548, July.
    3. Leonardo Vera, 2014. "The Simple Post-Keynesian Monetary Policy Model: An Open Economy Approach," Review of Political Economy, Taylor & Francis Journals, vol. 26(4), pages 526-548, October.
    4. Giorgos Argitis, 2011. "A view on post-Keynesian interest rate policy," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 8(1), pages 91-112.
    5. Hiroki Murakami, 2016. "Alternative monetary policies and economic stability in a medium-term Keynesian model," Evolutionary and Institutional Economics Review, Springer, vol. 13(2), pages 323-362, December.
    6. Eckhard Hein & Engelbert Stockhammer, 2010. "Macroeconomic Policy Mix, Employment and Inflation in a Post-Keynesian Alternative to the New Consensus Model," Review of Political Economy, Taylor & Francis Journals, vol. 22(3), pages 317-354.
    7. Greg Hannsgen & Tai Young-Taft, 2015. "Inside Money in a Kaldor-Kalecki-Steindl Fiscal Policy Model: The Unit of Account, Inflation, Leverage, and Financial Fragility," Economics Working Paper Archive wp_839, Levy Economics Institute.
    8. Toshio Watanabe, 2021. "Reconsideration of the IS–LM model and limitations of monetary policy: a Tobin–Minsky model," Evolutionary and Institutional Economics Review, Springer, vol. 18(1), pages 103-129, April.
    9. 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).
    10. Marc Lavoie & Mario Seccareccia, 2019. "Macroeconomics and natural rates: some reflections on Pasinetti’s fair rate of interest," Bulletin of Political Economy, Bulletin of Political Economy, vol. 13(2), pages 139-165, December.
    11. Rozite, Kristiana & Bezemer, Dirk J. & Jacobs, Jan P.A.M., 2019. "Towards a financial cycle for the U.S., 1973–2014," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    12. Michaelides, Panayotis G. & Milios, John G. & Konstantakis, Konstantinos N. & Tarnaras, Panayiotis, 2015. "Quantity-of-money fluctuations and economic instability: empirical evidence for the USA (1958–2006)," MPRA Paper 90145, University Library of Munich, Germany.
    13. Kenshiro Ninomiya & Masaaki Tokuda, 2021. "Structural change and financial instability in the US economy," Evolutionary and Institutional Economics Review, Springer, vol. 18(1), pages 205-226, April.
    14. Carl Chiarella & Peter Flaschel, 1999. "Towards Applied Disequilibrium Growth Theory: III Basic Partial Feedback Structures and Stability Issues," Working Paper Series 95, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    15. Yannis Dafermos, 2015. "Debt cycles, instability and fiscal rules: a Godley-Minsky model," Working Papers 20151509, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    16. Ogawa, Shogo, 2022. "Monetary growth with disequilibrium: A non-Walrasian baseline model," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 512-528.
    17. Bovari, Emmanuel & Giraud, Gaël & Mc Isaac, Florent, 2018. "Coping With Collapse: A Stock-Flow Consistent Monetary Macrodynamics of Global Warming," Ecological Economics, Elsevier, vol. 147(C), pages 383-398.
    18. Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Oxford University Press, vol. 35(3), pages 587-612.
    19. Michalis Nikiforos, 2017. "Uncertainty and Contradiction: An Essay on the Business Cycle," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(2), pages 247-264, June.
    20. Hein, Eckhard, 2023. "Inflation is always and everywhere … a conflict phenomenon: Post-Keynesian inflation theory and energy price driven conflict inflation," IPE Working Papers 224/2023, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

    More about this item

    Keywords

    Financial structure; Financial instability; Inflation targeting; Degree of competition;
    All these keywords.

    JEL classification:

    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eaiere:v:13:y:2016:i:1:d:10.1007_s40844-016-0029-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.