Debt and Investment in the Keen Model: a Reappraisal of Modeling Minsky
Dette et Investissement dans le modèle de Keen : quelle modélisation de Minsky ?
Résumé
We examine to which extent the Keen model (Keen 1995) is a faithful modelling of Minsky's Finance Instability Hypothesis. We focus on debt, money,
and debt-induced crisis. We propose a clear interpretation of the debt: households lend unconsumed income to firms to finance their investments, and
money creation is not necessary. We offer a detailed description of the economic collapse and analyse its causes thanks to numerical experiments. The
crisis is triggered by profits squeezed by wages and not by debt overhang. We test alternative assumptions on the investors' behaviour to show that
behaviour at very low profits is fundamental. We conclude that the Keen crisis has few Minskian flavours.
Domaines
Economies et finances
Origine : Fichiers produits par l'(les) auteur(s)
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