Towards a Theory of Endogenous Financial Instability and Debt-Deflation

Bill Lucarelli

Research output: Contribution to journalArticle

Abstract

"Post-Keynesian and heterodox critiques have challenged the Monetarist assumptions
of an exogenous money supply and the doctrine of monetary neutrality in the long run. Within
these heterodox currents, there has emerged a widespread consensus that the money supply
is endogenous—governed by the demand for credit and by the Keynesian notion of liquidity
preferences. These heterodox theories also reinstate the original insights by Keynes over the critical
issue of uncertainty in the behavior of investors, which contradicts the assumptions of rational
expectations. This article will examine some of these intellectual currents in order to develop a
more rigorous interpretation of the root causes of financial turbulence."
Original languageEnglish
Pages (from-to)327-343
Number of pages17
JournalWorld Review of Political Economy
Volume3
Issue number3
Publication statusPublished - 2012
Externally publishedYes

Fingerprint

Uncertainty
Post Keynesian
Investors
Credit
Financial instability
Money supply
Debt deflation
Turbulence
Monetary neutrality
John Maynard Keynes

Keywords

  • money
  • speculation
  • financial
  • labor
  • capital

Cite this

Towards a Theory of Endogenous Financial Instability and Debt-Deflation. / Lucarelli, Bill .

In: World Review of Political Economy, Vol. 3, No. 3, 2012, p. 327-343.

Research output: Contribution to journalArticle

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