This paper aims to help bridge the gap between theory and fact regarding the so-called “Minsky moments” by revisiting the “financial instability hypothesis” (FIH). We limit the analysis to the core of FIH—that is, to its strictly financial part. Our contribution builds on a...

The price of a safe asset reflects not only the expected discounted future cash flows but also future service flows, since retrading allows partial insurance of idiosyncratic risk in an incomplete markets setting. This lowers the issuers’ interest burden and allows the government to run a...

Part 1: Supply -- Chapter 1: Networks in a Firm: Why Firms -- Chapter 2: Networks in a Firm: Gabrielle's Barber Shop -- Chapter 3: Networks in a Firm: Separation of Ownership and Control -- Chapter 4: Networks in a Firm: Board of Directors -- Chapter 5: Fragility: The Urge to Build an Empire --...

This paper uses a simple model based on the board game Monopoly to analyze the drivers of house prices and wealth inequality. Simulations show that inequality generally builds up fast even if players have equal starting conditions and house prices are stable; rising house prices imply more...

This paper examines the effect of growth-enhancing policies in an R&D-based endogenous growth model when the government does not have the ability to raise taxes to finance the required expenses. We show that the government can increase the economic growth rate by debt-financed R&D subsidies...