A “Minsky crisis” in a Stock-Flow Consistent model

This study uses the Stock-Flow Consistent modelling approach to assess the relevance of Minsky’s demonstration of his financial instability hypothesis. We show that this demonstration, based on the assumption of a pro-cyclical leverage ratio, is incompatible with the Kaleckian analysis of profits en...

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Main Author: Tarik Mouakil
Format: Article
Language:English
Published: Association Recherche & Régulation 2014-12-01
Series:Revue de la Régulation
Subjects:
Online Access:https://journals.openedition.org/regulation/10963
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author Tarik Mouakil
author_facet Tarik Mouakil
author_sort Tarik Mouakil
collection DOAJ
description This study uses the Stock-Flow Consistent modelling approach to assess the relevance of Minsky’s demonstration of his financial instability hypothesis. We show that this demonstration, based on the assumption of a pro-cyclical leverage ratio, is incompatible with the Kaleckian analysis of profits endorsed by Minsky. Therefore we suggest replacing the assumption of a pro-cyclical leverage ratio with one of a pro-cyclical short-term borrowing, which also appears in Minsky’s work.
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spelling doaj-art-d95a560bdb3c49f1a33d0287f0fbfaef2025-01-30T14:25:50ZengAssociation Recherche & RégulationRevue de la Régulation1957-77962014-12-011610.4000/regulation.10963A “Minsky crisis” in a Stock-Flow Consistent modelTarik MouakilThis study uses the Stock-Flow Consistent modelling approach to assess the relevance of Minsky’s demonstration of his financial instability hypothesis. We show that this demonstration, based on the assumption of a pro-cyclical leverage ratio, is incompatible with the Kaleckian analysis of profits endorsed by Minsky. Therefore we suggest replacing the assumption of a pro-cyclical leverage ratio with one of a pro-cyclical short-term borrowing, which also appears in Minsky’s work.https://journals.openedition.org/regulation/10963Minskyfinancial crisesStock-Flow models
spellingShingle Tarik Mouakil
A “Minsky crisis” in a Stock-Flow Consistent model
Revue de la Régulation
Minsky
financial crises
Stock-Flow models
title A “Minsky crisis” in a Stock-Flow Consistent model
title_full A “Minsky crisis” in a Stock-Flow Consistent model
title_fullStr A “Minsky crisis” in a Stock-Flow Consistent model
title_full_unstemmed A “Minsky crisis” in a Stock-Flow Consistent model
title_short A “Minsky crisis” in a Stock-Flow Consistent model
title_sort minsky crisis in a stock flow consistent model
topic Minsky
financial crises
Stock-Flow models
url https://journals.openedition.org/regulation/10963
work_keys_str_mv AT tarikmouakil aminskycrisisinastockflowconsistentmodel
AT tarikmouakil minskycrisisinastockflowconsistentmodel