This paper develops a stock-flow-consistent macroeconomic model where bank profitability and bank leverage play a crucial role in the determination of firms' liability structure. The model assumes that banks' credit supply depends on bank profitability as well as firms' profit–interest ratio....

A growing literature suggests that 'financialisation' may weaken the performance of non-financial corporations and constrain the growth of aggregate demand. This paper uses two alternative approaches--one derived from Skott and one from Lavoie and Godley--and two different settings--a...

Most Kaleckian models assume a perfectly elastic labor supply, an assumption that is questionable for many developed economies. This paper presents simple labor-constrained Kaleckian models and uses these models to compare the implications of financialization under labor-constrained and...

This paper presents a stock-flow consistent macroeconomic model in which fi- nancial fragility in firm and household sectors evolves endogenously through the interaction between real and financial sectors. Changes in firms’ and households’ financial practices produce long waves. The Hopf...

This paper presents a stock-flow consistent macroeconomic model in which financial fragility in firm and household sectors evolves endogenously through the interaction between real and financial sectors. Changes in firms' and households' financial practices produce long waves. The Hopf...

In this paper we consider a modified version of Diamond’s OLG model. We show, first, that dynamic inefficiency may be relevant when the presence of imperfect competition is taken into account. Second, if fiscal policy is used to avoid inefficiency and maintain an optimal capital intensity, the...