scholarly journals Financial Structure, Cycle, and Instability

2021 ◽  
Author(s):  
Kenshiro Ninomiya
Keyword(s):  
Financial Crisis ◽  
Mathematical Models ◽  
Important Determinant ◽  
Financial Structure ◽  
Financial Fragility ◽  
Financial Instability ◽  
Mortgage Crisis ◽  
Real Factor ◽  
Financial Cycles

Abstract The subprime loan mortgage crisis has revived scholarly interest in Minsky’s financial instability hypothesis. The related mathematical models present two types of Minskian financial structures. We construct macrodynamic models that consider both structures and discuss financial instability and cycles. We also demonstrate that one of the financial cycles occurs when a real factor stabilizes the economy. The burden of interest-bearing debt is an important determinant of the cycle. We posit that the escalating financial fragility in this cycle is a more appropriate interpretation of the Minskian financial structure that refers to hedging, speculative and Ponzi behaviors. We further demonstrate that another financial structure destabilizes the economy. If the instability occurs at the point of fragility, then the economy may deteriorate into financial crisis. Fragility then becomes instability.JEL classifications: E12, E32, E33, E43

scholarly journals FINANCING POLICY OF FIRMS IN THE CONTEXT OF CRISIS-INDUCED VULNERABILITIES

2017 ◽  
Author(s):  
Mihaela Brindusa Tudose ◽  
Valentina Diana Rusu
Keyword(s):  
Financial Crisis ◽  
Financial Structure ◽  
Debt Financing ◽  
Financial Fragility ◽  
Economic Conditions ◽  
Financing Policy ◽  
Positive Effects ◽  
Financial Balance

Our study analyses the changes in the financial structure of the firms in the context of the vulnerabilities induced by the financial crisis. The study show that there have been registered a reconfiguration of firms’ financial structure which has triggered an increase in their financial fragility and vulnerability to crises. The results obtained confirm that the effects of financing differ depending on the economic conditions in particular period (normal periods and crisis periods). In tranquil times solvency is more important for the firms than liquidity. After crisis, the firms became more cautious regarding liquidity, solvency and the prospect of securing long-term financial balance. These firms have abandoned the objective of maximizing the positive effects of debt financing adopting a more prudent financing.

scholarly journals Understanding Financial Instability: Minsky Versus the Austrians

2016 ◽  
Vol 22 (1) ◽  
Author(s):  
Ludwig Van Den Hauwe
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Critical Evaluation ◽  
Central Planning ◽  
Financial Instability ◽  
Conceptual Level ◽  
Theoretical Frameworks ◽  
Historical Experience ◽  
The Global Financial Crisis ◽  
Cross Fertilization

AbstractAlthough Minsky’s interpretation of Keynes’s macroeconomics and essential message clashes with authoritative alternative interpretations, it has become increasingly influential during the years following the Global Financial Crisis, even in mainstream circles. This paper offers a critical evaluation of Minsky’s Financial Instability Hypothesis from the perspective of the alternative Austro-Wicksellian paradigm. Although some of the similarities and/or analogies between Minsky’s approach and that of the Austrian School suggest a more than merely superficial affinity between the two theoretical frameworks and although some scope for cross-fertilization between both approaches can be found, both theoretically and empirically, at a fundamental conceptual level both theories remain incompatible and difficult if not impossible to reconcile, in particular in terms of fundamental causality and in terms of policy conclusions and prescriptions. Despite the fact that Minsky’s policy conclusions are multifaceted and somewhat eclectic, they manifest a lack of familiarity with the conclusions of the Austrian analysis of the problems of central planning by Big Players such as Big Bank and Big Government. Both approaches also offer contrasting interpretations of the historical experience of the Global Financial Crisis.

scholarly journals نحو قراءة موضوعية لكتابات غير المسلمين عن التمويل الإسلامي في ضوء الأزمة المالية العالمية: وِلمْ بويتر أُنموذجاً

2014 ◽  
Vol 20 (78) ◽  
pp. 104-75
Author(s):  
أحمد مهدي بلوافي
Keyword(s):  
Financial Crisis ◽  
Islamic Finance ◽  
International Financial Crisis ◽  
Mortgage Crisis ◽  
The Subject ◽  
Muslim Scholars

تهدف هذه الورقة إلى عرض وتحليل أنموذج من كتابات غير المسلمين عن التمويل الإسلامي في أعقاب أزمة قروض الرهن العقاري الأمريكية، وما تبعها من أزمة عالمية، وذلك من أجل رسم معالم منهجية في تناول الموضوع تسهم في تزويد الباحثين في حقل الاقتصاد والتمويل الإسلامي بأدوات تساعد على توخي الموضوعية، والدقة، والأمانة في النقل والتناول، والبعد عن الطرح "الأيديولوجي"، أو العاطفي الذي يستند إلى قناعات ومواقف مسبقة لا يسندها الدليل العلمي، ولا الواقع العملي. This paper aims to present and analyze an example from the writings of non-Muslim scholars about Islamic finance in the wake of the American mortgage crisis, and the subsequent International financial crisis, in order to identify some methodological milestones in understanding the issue, and to provide researchers in the field of Islamic economics and finance with instruments that would help to exercise objectivity, accuracy, and honesty in handling the writings on the subject, and to avoid "ideological", or emotional readings based on preconception ideas and position void of scientific or practical evidence.

scholarly journals Financial Sector Liberalization and Financial Instability: Case of Selected Southern African Development Community Member Countries

2018 ◽  
Vol 10 (6(J)) ◽  
pp. 42-49
Author(s):  
Nolungelo Cele ◽  
Kapingura FM
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Financial Liberalization ◽  
Financial Sector ◽  
Financial Instability ◽  
Domestic Economy ◽  
Financial Reforms ◽  
Empirical Results ◽  
The Face ◽  
Almost All

The importance of financial liberalization is well documented in the literature. However, there has been an emergency of studies, which indicate that this can be another channel through which financial instability is generated in the domestic economy. Utilising data from four SADC countries, the empirical findings show that financial reforms are positively related to financial instability in almost all the specifications. The empirical results further revealed that financial instability intensifies in the face of a financial crisis. The result suggests that financial liberalization can therefore be another source of financial instability in the region. The empirical results imply that though policymakers should liberalise the financial system, policies aimed at maintaining financial stability should also be promoted.

Lessons from the Crisis

2010 ◽  
Author(s):  
Jean Tirole
Keyword(s):  
Public Policy ◽  
Financial Crisis ◽  
Real Estate ◽  
Consumer Protection ◽  
Financial Regulation ◽  
Financial Sector ◽  
System Reform ◽  
Financial Reforms ◽  
Mortgage Crisis ◽  
Regulatory Failure

This chapter aims to contribute to the debate on financial system reform. The first part describes what is perceived to be a massive regulatory failure, a breakdown that goes all the way from regulatory fundamentals to prudential implementation. The second part discusses some implications of recent events for financial sector regulation. It argues that to avoid a repetition of the financial crisis, we need both to change public policies that contributed to the crisis (particularly the mortgage crisis) and to institute financial reforms. Desirable reforms of public policy regarding real estate lending include promoting consumer protection and reducing subsidies. Financial regulation must also be international. The creation of supranational regulatory structures has become increasingly urgent in a world in which institutions and counterparties are truly international.

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