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
- Publication Type
- Other publication or document type
Botte, F., & Cottin-Euziol, E. (2016). Debt-Driven Business Cycles in a Stock-Flow Consistent Agent-Based Model.
- Projects involved
- Distributed Global Financial Systems for Society (DOLFINS)