Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model
In a Kaleckian distribution and growth model with workers’ debt we examine the short and long run effects of three stylized facts of “finance-dominated capitalism”: a fall in animal spirits of the firm sector with respect to real investment in capital stock, re-distribution of income at the expense...
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| Format: | Article |
| Language: | English |
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Associazione Economia civile
2012-04-01
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| Series: | PSL Quarterly Review |
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| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/9937 |
| _version_ | 1811172335354380288 |
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| author | Eckhard Hein |
| author_facet | Eckhard Hein |
| author_sort | Eckhard Hein |
| collection | DOAJ |
| description | In a Kaleckian distribution and growth model with workers’ debt we examine the short and long run effects of three stylized facts of “finance-dominated capitalism”: a fall in animal spirits of the firm sector with respect to real investment in capital stock, re-distribution of income at the expense of the wage share, and increasing lending of rentiers to workers for consumption purposes. In particular, we specify the conditions for long-run stability of the workers’ debt-capital ratio. We thus identify the threshold for this ratio to turn unstable causing increasing financial fragility and finally financial crisis due to systemic stock-flow or stock-stock dynamics.
JEL Codes: E12, E21, E22, E25, O41
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| first_indexed | 2024-04-10T17:28:17Z |
| format | Article |
| id | doaj.art-924c36bc06c44bef8152b5c3b318e3c8 |
| institution | Directory Open Access Journal |
| issn | 2037-3635 2037-3643 |
| language | English |
| last_indexed | 2024-04-10T17:28:17Z |
| publishDate | 2012-04-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj.art-924c36bc06c44bef8152b5c3b318e3c82023-02-03T16:51:49ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432012-04-016526010.13133/2037-3643/9937Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth modelEckhard HeinIn a Kaleckian distribution and growth model with workers’ debt we examine the short and long run effects of three stylized facts of “finance-dominated capitalism”: a fall in animal spirits of the firm sector with respect to real investment in capital stock, re-distribution of income at the expense of the wage share, and increasing lending of rentiers to workers for consumption purposes. In particular, we specify the conditions for long-run stability of the workers’ debt-capital ratio. We thus identify the threshold for this ratio to turn unstable causing increasing financial fragility and finally financial crisis due to systemic stock-flow or stock-stock dynamics. JEL Codes: E12, E21, E22, E25, O41 https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/9937Finance-dominated capitalismdistributionhousehold debtfinancial fragilitygrowthKaleckian model |
| spellingShingle | Eckhard Hein Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model PSL Quarterly Review Finance-dominated capitalism distribution household debt financial fragility growth Kaleckian model |
| title | Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model |
| title_full | Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model |
| title_fullStr | Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model |
| title_full_unstemmed | Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model |
| title_short | Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model |
| title_sort | finance dominated capitalism re distribution household debt and financial fragility in a kaleckian distribution and growth model |
| topic | Finance-dominated capitalism distribution household debt financial fragility growth Kaleckian model |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/9937 |
| work_keys_str_mv | AT eckhardhein financedominatedcapitalismredistributionhouseholddebtandfinancialfragilityinakaleckiandistributionandgrowthmodel |