Publications

194 publications found, searching for 'Financial Instability '

• One-Pager No. 54 February 06, 2018

  Why the United States Will Beat China to the Next Minsky Moment

  L. Randall Wray
  Abstract

  The outgoing governor of the People’s Bank of China recently warned of a possible Chinese “Minsky moment”—Paul McCulley’s term, most recently applied to the 2007 US real estate crash that reverberated around the world as a global financial crisis. Although Western commentators have weighed in on both sides of the debate about the likelihood of […]

  Download One-Pager No. 54 PDF (80.80 KB)
• Policy Notes No. 1 February 06, 2018

  Does the United States Face Another Minsky Moment?

  L. Randall Wray
  Abstract

  It is beginning to look a lot like déjà vu in the United States. According to Senior Scholar L. Randall Wray, the combination of overvalued stocks, overleveraged banks, an undersupervised financial system, high indebtedness across sectors, and growing inequality together should remind one of the conditions of 1929 and 2007. Comparing the situations of the […]

  Download Policy Note 2018/1 PDF (334.91 KB)
• Working Paper No. 896 September 04, 2017

  Minsky’s Financial Fragility

  Ernani Teixeira Torres Filho, Norberto Montani Martins, and Caroline Yukari Miaguti
  Abstract

  The present paper applies Hyman P. Minsky’s insights on financial fragility in order to analyze the behavior of electricity distribution companies in Brazil from 2007 to 2015. More specifically, it builds an analytical framework to classify the firms operating in this sector into Minskyan risk categories and assess how financial fragility evolved over time, in […]

  Download Working Paper No. 896 PDF (348.46 KB)
• Policy Notes No. 2 July 07, 2017

  The Concert of Interests in the Age of Trump

  Jan Kregel
  Abstract

  If the Trump administration is to fulfill its campaign promises to this age’s “forgotten” men and women, Director of Research Jan Kregel argues, it should embrace the broader lesson of the 1930s: that government regulation and fiscal policy are crucial in addressing changes in the economic and financial structure that have exacerbated the problems faced […]

  Download Policy Note 2017/2 PDF (190.65 KB)
• Working Paper No. 892 June 21, 2017

  Understanding Financialization

  Charles J. Whalen
  Abstract

  Since the death of Hyman Minsky in 1996, much has been written about financialization. This paper explores the issues that Minsky examined in the last decade of his life and considers their relationship to that financialization literature. Part I addresses Minsky’s penetrating observations regarding what he called money manager capitalism. Part II outlines the powerful […]

  Download Working Paper No. 892 PDF (368.51 KB)
• Working Paper No. 875 September 27, 2016

  Minsky at Basel

  Giuseppe Mastromatteo, and Lorenzo Esposito
  Abstract

  The global financial crisis shattered the conventional wisdom about how financial markets work and how to regulate them. Authorities intervened to stop the panic—short-term pragmatism that spoke volumes about the robustness of mainstream economics. However, their very success in taming the collapse reduced efforts to radically change the “big bank” business model and lessened the […]

  Download Working Paper No. 875 PDF (432.86 KB)
• Working Paper No. 869 June 24, 2016

  Have We Been Here Before?

  Apostolos Fasianos, Diego Guevara, and Christos Pierros
  Abstract

  This paper explores from a historical perspective the process of financialization over the course of the 20th century. We identify four phases of financialization: the first, from the 1900s to 1933 (early financialization); the second, from 1933 to 1940 (transitory phase); the third, between 1945 and 1973 (definancialization); and the fourth period begins in the […]

  Download Working Paper No. 869 PDF (920.59 KB)
• Public Policy Brief No. 141 March 25, 2016

  What We Could Have Learned from the New Deal in Confronting the Recent Global Recession

  Jan Kregel
  Abstract

  To the extent that policymakers have learned anything at all from the Great Depression and the policy responses of the 1930s, the lessons appear to have been the wrong ones. In this public policy brief, Director of Research Jan Kregel explains why there is still a great deal we have to learn from the New […]

  Download Public Policy Brief No. 141, 2016 PDF (313.69 KB)
• Book Series November 05, 2015

  Financial Regulation in the European Union

  Abstract

  Have past and more recent regulatory changes contributed to increased financial stability in the European Union (EU), or have they improved the efficiency of individual banks and national financial systems within the EU? Edited by Rainer Kattel, Tallinn University of Technology, Director of Research Jan Kregel, and Mario Tonveronachi, University of Siena, this volume offers […]

• Book Series November 05, 2015

  Why Minsky Matters: An Introduction to the Work of a Maverick Economist

  L. Randall Wray
  Abstract

  Perhaps no economist was more vindicated by the global financial crisis than Hyman P. Minsky (1919–1996). Although a handful of economists raised alarms as early as 2000, Minsky’s warnings began a half century earlier, with writings that set out a compelling theory of financial instability. Yet even today he remains largely outside mainstream economics; few […]

• Working Paper No. 849 October 23, 2015

  Bank Leverage Ratios and Financial Stability

  Emilios Avgouleas
  Abstract

  Bank leverage ratios have made an impressive and largely unopposed return; they are mostly used alongside risk-weighted capital requirements. The reasons for this return are manifold, and they are not limited to the fact that bank equity levels in the wake of the global financial crisis (GFC) were exceptionally thin, necessitating a string of costly […]

  Download Working Paper No. 849 PDF (394.17 KB)
• Working Paper No. 847 October 16, 2015

  Integration, Spurious Convergence, and Financial Fragility

  Matías Vernengo, and Esteban Pérez-Caldentey
  Abstract

  The Spanish crisis is generally portrayed as resulting from excessive spending by households, associated with a housing bubble and/or excessive welfare spending beyond the economic possibilities of the country. We put forward a different hypothesis. We argue that the Spanish crisis resulted, in the main, from a widening deficit position in the nonfinancial corporate sector—the […]

  Download Working Paper No. 847 PDF (652.11 KB)
• Working Paper No. 839 June 01, 2015

  Inside Money in a Kaldor-Kalecki-Steindl Fiscal Policy Model

  Tai Young-Taft
  Abstract

  We hope to model financial fragility and money in a way that captures much of what is crucial in Hyman Minsky’s financial fragility hypothesis. This approach to modeling Minsky may be unique in the formal Minskyan literature. Namely, we adopt a model in which a psychological variable we call financial prudence (P) declines over time […]

  Download Working Paper No. 839 PDF (909.30 KB)
• Working Paper No. 837 May 06, 2015

  Χρηματοδότηση της κεφαλαιακής ανάπτυξης της οικονομίας

  L. Randall Wray, and Mariana Mazzucato
  Abstract

  Η παρούσα εργασία εξετάζει το ρόλο που διαδραματίζει η χρηματοδότηση στην προώθηση της κεφαλαιακής ανάπτυξης της οικονομίας, με ιδιαίτερη έμφαση στην τρέχουσα κατάσταση στις Ηνωμένες Πολιτείες και το Ηνωμένο Βασίλειο. Ορίζουμε τόσο την έννοια της «χρηματοδότησης» όσο και αυτή της «κεφαλαιακής ανάπτυξης» της οικονομίας με αρκετά ευρύ τρόπο. Ξεκινάμε με την παρατήρηση ότι το χρηματοπιστωτικό […]

  Download Επιστημονική Εργασία υπό Εξέλιξη (Working Paper) No. 837 PDF (1.22 MB)
• Working Paper No. 837 May 06, 2015

  Financing the Capital Development of the Economy

  L. Randall Wray, and Mariana Mazzucato
  Abstract

  This paper discusses the role that finance plays in promoting the capital development of the economy, with particular emphasis on the current situation of the United States and the United Kingdom. We define both “finance” and “capital development” very broadly. We begin with the observation that the financial system evolved over the postwar period, from […]

  Download Working Paper No. 837 PDF (855.49 KB)
• One-Pager No. 49 May 01, 2015

  Δανείζοντας στα τυφλά

  Matthew Berg
  Abstract

  Τα πρακτικά του 2008 της Ομοσπονδιακής Επιτροπής Ανοικτής Αγοράς παρέχουν ένα σπάνιο πορτραίτο του τρόπου με τον οποίον οι χαράκτες πολιτικής ανταποκρίθηκαν στην εξέλιξη της μεγαλύτερης χρηματοπιστωτικής κρίσης στον κόσμο μετά τη Μεγάλη Ύφεση του ΄30. Τα πρακτικά αποκαλύπτουν ότι η Ομοσπονδιακή Επιτροπή Ανοικτής Αγοράς δεν είχε ικανοποιητική κατανόηση των τεραστίων διαστάσεων που είχε λάβει […]

  Download Μονοσέλιδο No. 49 PDF (246.98 KB)
• One-Pager No. 49 May 01, 2015

  Lending Blind

  Matthew Berg
  Abstract

  The 2008 Federal Open Market Committee (FOMC) transcripts provide a rare portrait of how policymakers responded to the unfolding of the world’s largest financial crisis since the Great Depression. The transcripts reveal an FOMC that lacked a satisfactory understanding of a shadow banking system that had grown to enormous proportions—an FOMC that neither comprehended the […]

  Download One-Pager No. 49 PDF (77.13 KB)
• Research Project Report April 06, 2015

  Reforming the Fed’s Policy Response in the Era of Shadow Banking

  Abstract

  This monograph is part of the Levy Institute’s Research and Policy Dialogue Project on Improving Governance of the Government Safety Net in Financial Crisis, a two-year project funded by the Ford Foundation. This is the fourth in a series of reports summarizing the findings of the Research and Policy Dialogue Project on Improving Governance of […]

  Download Research Project Report, April 2015 PDF (4.21 MB)
• Policy Notes No. 1 February 12, 2015

  Europe at the Crossroads

  Jan Kregel
  Abstract

  Given the continuing divergence between progress in the monetary field and political integration in the euro area, the German interest in imposing austerity may be seen as representing an attempt to achieve, de facto, accelerated progress toward political union; progress that has long been regarded by Germany as a precondition for the success of monetary […]

  Download Policy Note 2015/1 PDF (365.05 KB)
• Policy Notes No. 1 February 12, 2015

  Η Ευρώπη στο σταυροδρόμι

  Jan Kregel
  Abstract

  Με δεδομένη τη συνεχιζόμενη απόκλιση ανάμεσα στην πρόοδο στον τομέα της νομισματικής και της πολιτικής ολοκλήρωσης στη ζώνη του ευρώ, το ενδιαφέρον της Γερμανίας σχετικά με την επιβολή της λιτότητας μπορεί να θεωρηθεί ότι αντιπροσωπεύει μια προσπάθεια για την επιτάχυνση της προόδου προς την πολιτική ένωση, η πρόοδος της οποίας θεωρείται από τη Γερμανία ως […]

  Download Σημείωμα Πολιτικής 2015/1 PDF (571.29 KB)
• Working Paper No. 829 January 22, 2015

  Η κατάργηση του νόμου Glass-Steagall και η έκτακτη παρέμβαση του Ομοσπονδιακού Αποθεματικού κατά τη διάρκεια της παγκόσμιας χρηματοοικονομικής κρίσης

  Yeva Nersisyan
  Abstract

  Πριν από την παγκόσμια χρηματοπιστωτική κρίση επικρατούσε η αντίληψη ότι η στήριξη του δανειστή έσχατης καταφυγής περιοριζόταν στις εμπορικές τράπεζες. Ωστόσο, κατά τη διάρκεια της κρίσης, η Ομοσπονδιακή Τράπεζα των ΗΠΑ δημιούργησε μια σειρά από μηχανισμούς για τη στήριξη των χρηματομεσιτών και των διαπραγματευτών, των αμοιβαίων κεφαλαίων, την εμπορική χρηματική αγορά, την αγορά ενυπόθηκων τίτλων […]

  Download Επιστημονική εργασία υπό εξέλιξη (Working Paper) No. 829 PDF (456.61 KB)
• Working Paper No. 829 January 22, 2015

  The Repeal of the Glass-Steagall Act and the Federal Reserve’s Extraordinary Intervention during the Global Financial Crisis

  Yeva Nersisyan
  Abstract

  Before the global financial crisis, the assistance of a lender of last resort was traditionally thought to be limited to commercial banks. During the crisis, however, the Federal Reserve created a number of facilities to support brokers and dealers, money market mutual funds, the commercial paper market, the mortgage-backed securities market, the triparty repo market, […]

  Download Working Paper No. 829 PDF (508.20 KB)
• Working Paper No. 828 January 15, 2015

  Η χρηματιστικοποίηση και οι εταιρικές επενδύσεις

  Sunanda Sen, and Zico DasGupta
  Abstract

  Η χρηματιστικοποίηση ανοίγει χώρο στις οικονομίες για την επέκταση του χρηματοοικονομικού τομέα και, με αυτόν τον τρόπο, συμβάλλει στην αύξηση του μεριδίου των χρηματοοικονομικών περιουσιακών στοιχείων στα χαρτοφυλάκια που κατέχονται από τους συμμετέχοντες στην αγορά. Η διαδικασία της χρηματιστικοποίησης, που καθοδηγείται σε μεγάλο βαθμό από την απορρύθμιση, λειτουργεί με το να καθιστά τα χρηματοοικονομικά περιουσιακά […]

  Download Επιστημονική εργασία υπό εξέλιξη (Working Paper) No. 828 PDF (814.68 KB)
• Working Paper No. 828 January 15, 2015

  Financialization and Corporate Investments

  Sunanda Sen, and Zico DasGupta
  Abstract

  Financialization creates space for the financial sector in economies, and in doing so helps to raise the share of financial assets in the portfolios held by market participants. Largely driven by deregulation, the process works to make financial assets relatively attractive as compared to other assets, by offering both better returns and potential capital gains. […]

  Download Working Paper No. 828 PDF (433.95 KB)