Headline: Debt-Driven Business Cycles in a Stock-Flow Consistent Agent-Based Model

This paper studies the effects of firms’ indebtedness on the dynamics of a monetary production economy. Starting from the work of Minsky and Palley, we build a stock-flow consistent agent-based model that emphasizes the effects of firms’ debt on macro dynamics and produce endogenous business cycles. We identify two effects of debt: an aggregate demand increasing effect and a functional income distribution effect and describe their consequences during the different phases of the cycle. These effects are specific to this study but are compatible with the existing literature.

Publication Year
2016
Publication Type
Other publication or document type
Citation

Botte, F., Cottin-Euziol, E. (2016): Debt-Driven Business Cycles in a Stock-Flow Consistent Agent-Based Model.DOI: http://doi.org/10.13140/RG.2.2.23744.53765

DOI
10.13140/RG.2.2.23744.53765
Projects involved
Distributed Global Financial Systems for Society (DOLFINS)