Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248422 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 173/2021
Publisher: 
Hochschule für Wirtschaft und Recht Berlin, Institute for International Political Economy (IPE), Berlin
Abstract: 
We outline and simulate a stylised post-Keynesian two country stock-flow consistent model to demonstrate the interconnection of three of the main features/outcomes of finance-dominated capitalism, namely worsening income distribution for the bottom 90% households, the rise of international imbalances and the build-up of financial fragility. In the model, twobasic regimesemerge, depending on the institutional setting of the respective model economy:the debt-led private demand boom regime (DLPD) and the export-led mercantilist regime(ELM). We demonstrate the complementarity and interdependence of these two regimesand show how this constellation transformed after the crisis into the domestic demand-led regime (DDL) stabilised by government deficits, on the one hand, andELMregimes, on the other, depending ontherequired deleveraging of private household debt, distributional developments and fiscal policy.
Subjects: 
post-Keynesian macroeconomics
financialisation
growth regimes
institutions
inequality
debt
stock-flow consistent model
JEL: 
B59
E02
E11
E12
E25
E65
F41
O41
Document Type: 
Working Paper

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