Arbeitspapier

Embedding Minsky's taxonomy of cash flows into a corporate finance framework (The microeconomic linkage between speculative and Ponzi schemes)

When Minsky put forward his financial instability hypothesis, he resorted - among other macroeconomic tools of analysis - to categories like income, balance-sheet, and portfolio cash flows, so as to cope with the successive stages of hedging, speculative and Ponzi schemes. This paper makes two contributions to the lively debate arousing from Minsky's ideas. Firstly, it embeds Minsky's taxonomy into the incremental cash-flow model that has become part and parcel of the modern approach to Corporate Finance. Secondly, and by means of the referred model, we set up a microeconomic linkage to financial instability, by showing how hedging, speculative and Ponzi devices actually break off the natural mutuality that binds together so effectively cash flows from assets - which create economic value - with those to be delivered toward both creditors and stockholders.

Language
Englisch

Bibliographic citation
Series: Serie Documentos de Trabajo ; No. 497

Classification
Wirtschaft
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Subject
Minsky's taxonomy of cash flows
incremental cash flow model
financial instability
Ponzi scheme
speculative finance
Unternehmensfinanzierung
Cash Flow

Event
Geistige Schöpfung
(who)
Apreda, Rodolfo
Event
Veröffentlichung
(who)
Universidad del Centro de Estudios Macroeconómicos de Argentina (UCEMA)
(where)
Buenos Aires
(when)
2012

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Apreda, Rodolfo
  • Universidad del Centro de Estudios Macroeconómicos de Argentina (UCEMA)

Time of origin

  • 2012

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