Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/59302
Authors: 
Hein, Eckhard
Year of Publication: 
2011
Series/Report no.: 
Working Paper, Institute for International Political Economy Berlin 11/2011
Abstract: 
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.
Subjects: 
Finance-dominated capitalism
distribution
household debt
financial fragility
growth
Kaleckian model
JEL: 
E12
E21
E22
E25
O41
Document Type: 
Working Paper

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