Artikel
The economics of deleveraging: The aftermath of financialization
This paper provides a simple model of deleveraging that surfaces the contradictions inherent in neoliberal financialization and explains the pattern of US business cycles over the past thirty years. Deleveraging involves a two step correction. The first step is when a borrowing boom ends. The second step is when agents increase saving and re-pay debt. Borrowing accelerates economic activity as consumers spend. When borrowing stops, the economy slows. Moreover, the economy is further slowed by accumulated debt burdens. With deleveraging, households increase saving and re-pay debt which deepens the economic slowdown. Repayment reduces debt, helping economic activity eventually to recover.
- Language
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Englisch
- Bibliographic citation
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Journal: Intervention. European Journal of Economics and Economic Policies ; ISSN: 2195-3376 ; Volume: 07 ; Year: 2010 ; Issue: 2 ; Pages: 401-413
- Classification
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Wirtschaft
Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data)
Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
Business Fluctuations; Cycles
- Subject
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deleveraging
debt
financialization
- Event
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Geistige Schöpfung
- (who)
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Palley, Thomas I.
- Event
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Veröffentlichung
- (who)
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Metropolis-Verlag
- (where)
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Marburg
- (when)
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2010
- DOI
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doi:10.4337/ejeep.2010.02.14
- Handle
- Last update
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10.03.2025, 11:46 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Palley, Thomas I.
- Metropolis-Verlag
Time of origin
- 2010
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