This paper uses a simple stock-flow consistent accounting framework as the basis for an analysis of the speculative financial behaviour of firms and households during a period of rising asset prices. Some shortcomings of Minsky’s theory of the business cycle are highlighted, both from a theoretical point of view and with respect to the stylised facts of the period preceding the crisis of 2007–08. An alternative mechanism is proposed, based on Toporowski’s “post-modern business cycle”, in which asset price inflation leads to redistribution of income at the intra-sectoral level.
Michell, J. (2014). Speculation, financial fragility and stock-flow consistency. In R. Bellofiore, & G. Vertova (Eds.), The Great Recession And The Contradictions Of Contemporary CapitalismEdward Elgar