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External Instability in Transition: Applying Minsky's Theory of Financial Fragility to International Markets

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  • Liudmila Malyshava

Abstract

This inquiry argues that the successful completion of the transition process in the post-Soviet economies is constrained by the prevailing social structure and low levels of technological progress, both of which require institutional reforms aimed at increasing growth in national income, productivity, and the degree of export competitiveness. Domestic policy implementation has not shown significant improvements on these fronts, given its short-term orientation, but instead resulted in stagnating growth rates, continuously accumulating levels of external debt, and decreasing living standards. The key to a successful completion of the transition process is therefore a combination of policies targeted at the dynamic transformation of production structures within an environment of financial stability and favorable macroeconomic conditions.

Suggested Citation

  • Liudmila Malyshava, 2018. "External Instability in Transition: Applying Minsky's Theory of Financial Fragility to International Markets," Economics Working Paper Archive wp_909, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_909
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    More about this item

    Keywords

    Transition Economies; Soviet Mode of Production; Technological Decay; International Capital Flows; External Instability; Debt Repayment;

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General

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