In this paper I will follow Hyman Minsky in arguing that the postwar period has seen a slow transformation of the economy from a structure that could be characterized as "robust" to one that is "fragile". While many economists and policymakers have argued that "no one saw it coming", Minsky and...

This article deals with the macro-economics of the Trans-European Automated Real-time Gross Settlement Express Transfer System (TARGET2). It is shown that TARGET2 contrib-utes to a misallocation of real resources. The discussion high-lights that there are no tendencies for rebalancing TARGET2...

In this paper I will follow Hyman Minsky in arguing that the postwar period has seen a slow transformation of the economy from a structure that could be characterized as "robust" to one that is "fragile." While many economists and policymakers have argued that "no one saw it coming," Minsky and...

The association between economic and financial stabilities and influence of macroeconomic policies on the financial sector creates scope of active policy role in financial stability. As a contribution to the existing body of knowledge, this study has analysed the implications of macroeconomic...

In one of the greatest extensions of property rights in human history, common law countries began giving rights to married women in the 1850s. Before this "women's liberation," the doctrine of coverture strongly incentivized parents of daughters to hold real estate, rather than financial assets...

Studies of the 2007-09 credit crisis and the resulting recession have revealed the inadequacy of the predominant theoretical frameworks and their failure to propose adequate policy solutions. The presence in the economy of “bank money” and a financial system (not only constituted by banks)...

It has been argued that foreign direct investment can exert upward or downward pressure on the domestic interest rate depending on foreign investors’ relative weights on internal and external finance with respect to the domestic economy. Additionally, a country’s level of institutional...

Are financial intermediaries inherently unstable? If so, why? What does this suggest about government intervention? To address these issues we analyze whether model economies with financial intermediation are particularly prone to multiple, cyclic, or stochastic equilibria. Four formalizations...

Are financial intermediaries inherently unstable? If so, why? What does this suggest about government intervention? To address these issues we analyze whether model economies with financial intermediation are particularly prone to multiple, cyclic, or stochastic equilibria. Four formalizations...

We propose a parsimonious framework for real rigidities, in the form of strategic complementarities, that can generate real and nominal dynamics and match key features of the data across several literatures. Existing menu-cost models featuring strategic complementarities require unrealistically...