Neo-Kaleckian models with financial cycles: A center-periphery framework

The article develops a Neo-Kaleckian model that takes into account the impact of financial cycles on demand regimes. Both the financial instability hypothesis and the paradox of debt are considered, as well as both the upward and the downward phases of the economic cycle. The baseline model is insuf...

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Bibliographic Details
Published inPSL quarterly review Vol. 71; no. 286
Main Author David Guimarães Coelho, Esteban Perez Caldentey
Format Journal Article
LanguageEnglish
Published Rome Associazione Economia Civile 01.09.2018
Associazione Economia civile
Subjects
Business cycles
Center and periphery
center-periphery
Developing countries
Economic models
International finance
LDCs
Markets
Minsky cycles
Neo-Kaleckian model
Neutrality
paradox of debt
Vulnerability
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Summary:The article develops a Neo-Kaleckian model that takes into account the impact of financial cycles on demand regimes. Both the financial instability hypothesis and the paradox of debt are considered, as well as both the upward and the downward phases of the economic cycle. The baseline model is insufficient to analyze financial variables in underdeveloped countries, as it does not take into consideration the non-neutrality of international financial markets. Following a center-periphery structure, we extend the model in order to discuss how financial movements in the periphery are mainly associated with external vulnerability.
ISSN:2037-3635
2037-3643
DOI:10.13133/2037-3643_71.286_3