Macroeconomic instability and microeconomic financial fragility: a stock-flow consistent approach with heterogeneous agents∗
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چکیده
This paper introduces heterogeneous microeconomic behavior into a demand-driven stock-flow consistent model, in order to study the joint dynamics of leverage, income distribution and aggregate demand. The distinctive feature is in that the aggregation of heterogeneous agents is not performed numerically as in traditional agent-based models but by means of an innovative analytical methodology, originally developed in statistical mechanics and recently imported into macroeconomics. The numerical analysis of the dynamical system reveals that a faster expansion of the financial sector, relatively to the real sector, can sustain growth even with a rising inequality and stagnating demand from wage earners. The side effects of the financialization are higher leverage and volatility of fluctuations. Financialization and leverage are also significantly impacted by the degree of heterogeneity in firms’ investment decisions. Financial support by the Institute for New Economic Thinking is gratefully acknowledged. Corresponding author: Corrado Di Guilmi. University of Technology, Sydney PO Box 123, Broadway, NSW 2007, Australia. Ph.: +61295147743, Fax: +61295147711. E-mail: [email protected].
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Financial Fragility and Macroeconomic Instability in a Heterogeneous Interacting Agents Framework
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تاریخ انتشار 2013