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Structures de financement et instabilités endogènes

Author

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  • Florence Barjou

Abstract

According to H. P. Minsky?s Financial Instability Hypothesis [1975], [1986], the endogenous deterioration of financial structures during growth phases generates endogenous dynamics. The traditional interpretation of Minsky?s analysis ascribes the origin of this process to irrational behaviours, as banks satisfy business?s external financing demand whereas debt ratios are high. We develop a model conveying the financial instability mechanism while at the same time taking into account a certain type of bank rationality. In fact, capital accumulation dynamics integrate a financial constraint similar to the one developed in financial accelerator models (Bernanke et Gertler [1989], [1990]). Financing costs are given by an endogenous external finance premium inversely related to debt ratios. Stability crucially depends on the level of agency costs and of debt ratios. Moreover, via a Hopf bifurcation, the external finance premium can generate cyclical endogenous dynamics. Classification JEL: G3, E32, E51

Suggested Citation

  • Florence Barjou, 2002. "Structures de financement et instabilités endogènes," Revue d'économie politique, Dalloz, vol. 112(4), pages 573-599.
    • Handle: RePEc:cai:repdal:redp_124_0573
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    Keywords

    financial structure; business cycle; financial instability; endogenous dynamics;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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