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Speculation, financial fragility and stock-flow consistency

Michell, Jo

Authors

Jo Michell Jo.Michell@uwe.ac.uk
Associate Professor in Economics



Contributors

Riccardo Bellofiore
Editor

Giovanna Vertova
Editor

Abstract

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.

Publication Date Dec 1, 2014
Peer Reviewed Peer Reviewed
Series Title New Directions in Modern Economics
Book Title The Great Recession And The Contradictions Of Contemporary Capitalism
ISBN 9780857938527
APA6 Citation 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
Keywords money, finance, stock-flow consistent models, Minksy
Publisher URL http://www.e-elgar.co.uk/bookentry_main.lasso?currency=US&id=14637
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