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Technology Shocks and Predictable Minsky Cycles

Author

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  • Gregory Phelan
  • Jean-Paul L’Huillier
  • Hunter Wieman

Abstract

This paper offers an economical and internally consistent model to rationalize macrofinancial boom-bust cycles. The authors present a simple model that can clarify the interaction of optimism with capital reallocation and demonstrate how this interaction can generate predictable boom-bust financial cycles. This clarification enhances our understanding of the channels through which credit markets could threaten financial stability (Working Paper no. 23-06).

Suggested Citation

  • Gregory Phelan & Jean-Paul L’Huillier & Hunter Wieman, 2023. "Technology Shocks and Predictable Minsky Cycles," Working Papers 23-06, Office of Financial Research, US Department of the Treasury.
    • Handle: RePEc:ofr:wpaper:23-06
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    File URL: https://www.financialresearch.gov/working-papers/files/OFRwp-23-06-technology-shocks-and-predictable-minsky-cycles.pdf
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    References listed on IDEAS

    as
    1. Akıncı, Özge & Chahrour, Ryan, 2018. "Good news is bad news: Leverage cycles and sudden stops," Journal of International Economics, Elsevier, vol. 114(C), pages 362-375.
    2. Chen Lian & Yueran Ma, 2021. "Anatomy of Corporate Borrowing Constraints," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(1), pages 229-291.
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    Cited by:

    1. Brianti, Marco & Cormun, Vito, 2024. "Expectation-driven boom-bust cycles," Journal of Monetary Economics, Elsevier, vol. 146(C).
    2. Francesco Zanetti & Masashige Hamano & Philip Schnattinger & Mototsugu Shintani & Iichiro Uesugi, 2025. "Credit Market Tightness and Zombie Firms: Theory and Evidence," CIGS Working Paper Series 25-005E, The Canon Institute for Global Studies.
    3. Masashige Hamano & Philip Schnattinger & Mototsugu Shintani & Iichiro Uesugi & Francesco Zanetti, 2025. "Credit Market Tightness and Zombie Firms: Theory and Evidence," CESifo Working Paper Series 11640, CESifo.

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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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