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.
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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
- Projects involved
- Distributed Global Financial Systems for Society (DOLFINS)