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Systemic financial fragility and the monetary circuit: a stock-flow consistent Minskian approach

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  • Marco Passarella

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Abstract

In the last few years, a number of scholars has referred to the crop of contributions of Hyman P. Minsky as „required reading? for understanding the tendency of capitalist economies to fall into recurring crises. However, the so-called „financial instability hypothesis? of Minsky relies on muchdisputed assumptions. Moreover, Minsky?s analysis of capitalism must be updated on the basis of the deep changes which, during the last three decades, have concerned the world economy. In order to overcome these theoretical difficulties, the paper supplies a simplified, but consistent, re-formulation of some of the most disputed aspects of Minsky?s theory by cross-breeding it with inputs from the current Post-Keynesian literature. This allows us to analyze (within a simplified stock-flow consistent monetary circuit-model) the impact of both „capital-asset inflation? and consumer credit on the financial „soundness? of a monetary economy of production.

Suggested Citation

  • Marco Passarella, 2012. "Systemic financial fragility and the monetary circuit: a stock-flow consistent Minskian approach," Working Papers 1202, Department of Economics and Technology Management, University of Bergamo.
  • Handle: RePEc:brh:wpaper:1202
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    Cited by:

    1. Blázquez-Fernández, Carla & González-Prieto, Noelia & Moreno-Mencía, Patricia, 2013. "Pharmaceutical Expenditure as a Determinant of Health Outcomes in EU Countries/El gasto farmacéutico como determinante de los resultados en salud en países de la UE," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 31, pages 379-396, Septiembr.
    2. Eibich, Peter & Ziebarth, Nicolas, 2014. "Examining the Structure of Spatial Health Effects in Germany Using Hierarchical Bayes Models," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 305-320.
    3. Filippini, M. & Heimsch, F. & Masiero, G., 2014. "Antibiotic consumption and the role of dispensing physicians," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 242-251.
    4. Mueller, Tanja & Östergren, Per-Olof, 2016. "The correlation between regulatory conditions and antibiotic consumption within the WHO European Region," Health Policy, Elsevier, vol. 120(8), pages 882-889.
    5. Peter Eibich & Nicolas R. Ziebarth, 2013. "Examining the Structure of Spatial Health Effects in Germany Using Hierarchical Bayes Models," SOEPpapers on Multidisciplinary Panel Data Research 620, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Keywords

    Financial Instability; Stock-Flow Consistency; Monetary Theory of Production;

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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