Arbeitspapier
A Macroeconometric Assessment of Minsky’s Financial Instability Hypothesis
The Financial Instability Hypothesis associated with Hyman Minsky has profound implications for the conduct of monetary policy in modern capitalist economies. At its core is the proposition that the central bank may contribute to the financial fragility of leveraged firms in its pursuit of inflation-targeting interest rate policies. This paper develops a small macroeconomic model incorporating many of the salient features of a Minskyan economy. The imposition of the resulting theoretical restrictions in a CVAR model provides support for Minsky’s main proposition that interest rate innovations can drive a wedge between the cash-inflows of firms and their debt-servicing obligations. The paper concludes that the implementation of countercyclical capital requirements can provide monetary policymakers with additional policy instruments that can be used to cool overheated sectors without recourse to the ‘blunt instrument’ of interest rate policy.
- Sprache
-
Englisch
- Erschienen in
-
Series: DEP (Socioeconomics) Discussion Papers - Macroeconomics and Finance Series ; No. 6/2013
- Klassifikation
-
Wirtschaft
Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
Model Construction and Estimation
Business Fluctuations; Cycles
Monetary Policy
- Thema
-
Monetary Policy
Inflation Targeting
Financial Instability Hypothesis
Cointegrating VAR
Asset Price Cycles
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Greenwood-Nimmo, Matthew
Tarassow, Artur
- Ereignis
-
Veröffentlichung
- (wer)
-
Hamburg University, Department Socioeconomics
- (wo)
-
Hamburg
- (wann)
-
2013
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Greenwood-Nimmo, Matthew
- Tarassow, Artur
- Hamburg University, Department Socioeconomics
Entstanden
- 2013
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