John Maynard Keynes

Minsky, Hyman P.

doi:10.1007/978-1-349-02679-1

Cited by 989 publications

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“…Here rising NFC debt levels have been identified as potential sign of financialisation (Orhangazi, 2008). Following Minsky, the ratio of debt stock to income flow is crucial to judge whether an economic unit (such as the firm) can stem the repayment of its debt (Minsky, 1975). Rising indebtedness can mean growing financial vulnerability since larger volumes of cash flow are required to meet future debt servicing commitments.…”

Section: Financialisation In Emerging Economies: a Literature Reviewmentioning

confidence: 99%

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Karwowski

Stockhammer

2017

Economic and Political Studies

125

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Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bankbased to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.Keywords: Financialisation; Emerging markets; Financial instability; Asset price volatility; Heterodox economics JEL codes: F30; F34; G01; G12; G15; B50 Acknowledgements: We would like to thank our colleague Rex McKenzie for comments on the paper. The usual disclaimers apply.

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Section: Financialisation In Emerging Economies: a Literature Reviewmentioning

confidence: 99%

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Karwowski

Stockhammer

2017

Economic and Political Studies

125

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“…Actually, investment demand is financed by credit-money generated by entrepreneurial borrowing from the banking system and not by any prior saving. Following the financial instability view developed by Minsky (1975Minsky ( , 1982, the capital development of the market economy is therefore conceived of as being accompanied by exchanges of present money for future money. The present money pays for resources that are used in the production of investment output, while the future money is the amount of profits that will accrue to firms as their capital assets are used in production.…”

Section: Introductionmentioning

confidence: 99%

Macrodynamics of debt regimes, financial instability and growth

Lima¹,

Meirelles

2006

Cambridge Journal of Economics

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It is developed a dynamic macromodel of utilization and growth of productive capacity, in which the supply of credit-money is endogenous and firms' debt position -and thus the financial fragility of the economy à la Hyman Minsky -is explicitly modeled. The rate of interest is set as a markup over the base rate, which is exogenously determined by the monetary authority. Banking markup varies with changes in economic activity, which is measured by capacity utilization, while firms' debt position varies with the rates of interest, profit and capital accumulation. Regarding dynamics, it is shown the possibility of relating the stability properties of a system with the interest rate and the debt ratio as state variables to the type of minskyan regime -hedge, speculative, Ponzi -which prevails. Key words: debt regimes; financial instability; growth Resumo: Desenvolve-se um modelo dinâmico de utilização e crescimento da capacidade produtiva, no qual a oferta de moeda de crédito é endógena e o endividamento das firmase, portanto, a fragilidade financeira da economia à Hyman Minsky -é explicitamente modelado. A taxa de juros é determinada através de um mark-up sobre a taxa básica fixada pela autoridade monetária. O mark-up bancário varia com mudanças no nível de atividade econômica, medido pela utilização da capacidade produtiva. Por seu turno, o grau de endividamento das firmas varia em função das taxas de lucro, de acumulação de capital físico e de juros. Em termos dinâmicos, mostra-se que é possível relacionar as condições de estabilidade do sistema formado pelas variáveis taxa de juros e endividamento das firmas ao tipo de regime minskyano -hedge, especulativo ou Ponzi -prevalecente. Palavras-chave: regimes de endividamento; instabilidade financeira; crescimento

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“…Thus Minsky (1975) showed the supply of credit contracting when lender's risk increased and the demand for credit contracting when borrower's risk increased. Since it is the short end of the market which dominates, it is bank perceptions which are more important when there is unsatisfied demand for credit.…”

Section: Non-conventional Non-neutrality I: Credit As a Social Relationmentioning

confidence: 99%

The Real (Social) Experience of Monetary Policy

Dow¹

2013

Financial Crises and the Nature of Capitalist Money

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This paper takes a socio-economic approach to considering money in relation to real experience, focusing on the real effects of monetary policy. While most of the economics literature focuses on interest-rate setting as the core tool of monetary policy, we focus here instead on signalling by the central bank as a mechanism for influencing expectations and behaviour in conditions of uncertainty. This involves addressing the social-conventional expectations among different groups (a mechanism for dealing with uncertainty) applied to their particular ways of framing the real and financial sectors. Actual credit conditions faced by borrowers in turn are the outcome of the conventional view among banks as a result of their framing and the influence of central bank signalling. These relations between central banks, banks and the non-bank public in turn normally rest on long-established relations of trust. We consider the real effects of monetary policy in circumstances where trust has broken down. *This chapter has benefited from helpful comments from

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John Maynard Keynes

Cited by 989 publications

References 0 publications

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Macrodynamics of debt regimes, financial instability and growth

The Real (Social) Experience of Monetary Policy

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