Minsky’s financial fragility: an empirical analysis of electricity distribution firms in Brazil (2007–2015)

Filho, Ernani Teixeira Torres; Martins, Norberto Montani; Miaguti, Caroline Yukari

doi:10.1080/01603477.2018.1503057

Cited by 10 publications

(6 citation statements)

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“…This methodology solves the problem of exogeneity, as the financial crisis phases are integrated into a whole theory to explain the operation of capitalist economies. To avoid mathematical formalism, he insisted on delivering his theory via a narrative approach, which leaves more space for his successors to explore [ 82 , 83 , 84 ], etc.…”

Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

“…The main methods used are the Copula model to simulate the joint distribution of risk factors, and the introduction of option pricing models and multivariate extreme value theory, or principal factor analysis to extract key factors using the DCC-GARCH model to model the correlation between multiple assets [ 8 ], and to establish multivariate quantitative indicators. Furthermore, to verify the economic structure variation as systemic risk takes place, VAR is usually adopted [ 82 , 83 , 84 ] tc.…”

Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

“…Moreover, by following a centre-periphery structure, the model explains how financial movements in the periphery associate with international financial markets’ movements and external vulnerability. Recent research in this field mainly focused on empirical research to support and verify FIH in different economies [ 82 , 83 , 84 ].…”

Section: Progress In Systemic Risk Researchmentioning

confidence: 99%

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A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

Bai

Sun

et al. 2020

Entropy

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The Covid-19 pandemic has brought about a heavy impact on the world economy, which arouses growing concerns about potential systemic risk, taking place in countries and regions. At this critical moment, it makes sense to interpret the systemic risk from the perspective of the financial crisis framework. By combing the latest research on systemic risks, we may arrive at some precautions relating to the current events. This literature review verifies the origin of systemic risk research. By comparing the retrieved and screened systemic literature with the relevant research on the financial crisis, more focus on the micro-foundations of systemic risk has been discovered. Besides, the measurement methods of systemic risks and the introduction of interdisciplinary methods have made the research in this field particularly active. This paper synthesizes the previous research conclusions to find the appropriate definition of systemic risk and combs the research literature of systemic risk from two lines: Firstly, conducting the division according to the sub-branch fields within the financial discipline and the relevant interdisciplinary research methods, which is helpful for scholars within and outside the discipline to have a more systematic understanding of the research in this field. Secondly predicting the research direction that can be expanded in this field.

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Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

Section: Progress In Systemic Risk Researchmentioning

confidence: 99%

See 1 more Smart Citation

A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

Bai

Sun

et al. 2020

Entropy

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“…В статье, посвященной финансовой нестабильности среди электроэнергетических компаний Бразилии в 2007-2015 гг. (Torres Filho et al, 2019), её авторы использовали другой метод классификации режимов финансирования, основанный на введенном ими индексе финансовой хрупкости, представляющим собой отношение суммы процентных выплат и краткосрочных долгов к прибыли до уплаты налогов, процентов и амортизации. Фирма, прибыли которой достаточно для выплат и процентных платежей и части основного долга, относится к хеджевому типу; те фирмы, прибыль которых превышает сумму необходимых процентных платежей, но недостаточна для выплат по основному долгу -к спекулятивному, а фирмы, прибыль которых либо является отрицательным числом, либо недостаточна даже для выплаты процентных платежей -к Понци-режиму.…”

Section: основные эмпирические приложения гипотезы финансовой нестаби...unclassified

An analysis of the French non-financial private sector based on the Financial Instability Hypothesis

2022

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The article analyzes the dynamics of the financial fragility of French private non-financial firms using the Financial Instability Hypothesis developed by Hyman Philip Minsky. This hypothesis contains analytical tools to explore the relationship between the course of the business cycle and the dynamics of the structure of private firms' financial flows. Our sample includes 208 private sector enterprises in France. The study covers time period from 1998 to 2018. The source of data is the Thomson Reuters platform. Related indicators are considered separately for three categories of companies depending on the size of their revenue -small, medium and large businesses -and for ten categories of companies depending on their industry affiliation. Three criteria are used to classify the companies into hedge firms, firms with speculative financing and Ponzi firms. Our empirical analysis showed that before the onset of the Great Recession in the French economy, the share of Ponzi firms grew, and reached its maximum at the peak of economic hardship. In line with the Financial Instability Hypothesis, the research findings confirm that the accumulation of financial fragility is associated with the onset of the Great Recession in France. It is further shown that small firms are much more financially fragile compared to medium and large businesses, and the real estate sector turned out to be the most financially fragile sector of the French economy.

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“…There are other papers that have employed the hedge, speculative and Ponzi finance regime but without focusing explicitly on the pro-cyclicality of financial fragility Schroeder (2009). documented a shift from hedge and speculative to Ponzi finance in the New Zealand firm sector during the period-2007. Torres Filho et al (2019 showed that the number of Ponzi Brazilian electricity distribution firms increased over the period 2008-13 Caldentey et al (2019).…”

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confidence: 99%

Minsky’s financial instability hypothesis

Nikolaidi¹

2021

A Modern Guide to Financial Shocks and Crises

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Since the Global Financial Crisis, Minsky's Financial Instability Hypothesis (FIH) has been receiving a growing attention in macroeconomic analyses and policy making. In this contribution I discuss the key dimensions and extensions of Minsky's FIH, focusing on how Minskyan frameworks have analysed the drivers of endogenous instability and cycles associated with corporate, household and external debt. I cover recent theoretical and empirical developments in the Minskyan literature and emphasise the unique evolutionary macrofinancial aspects of Minsky's approach. I also analyse the policy implications of Minsky's FIH and explain how Minsky's analysis can be used for our understanding of climateinduced financial instability, in light of the recent developments in the area of climate-related financial risks.

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Minsky’s financial fragility: an empirical analysis of electricity distribution firms in Brazil (2007–2015)

Cited by 10 publications

References 10 publications

A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

An analysis of the French non-financial private sector based on the Financial Instability Hypothesis

Minsky’s financial instability hypothesis

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