Financial Assets, Debt and Liquidity Crises : a Keynesian Approach.

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Cover; Financial Assets, Debt and Liquidity Crises; Title; Copyright; Contents; Figures; Tables; Notation; Preface; 1 Financial crises and the macroeconomy; 1.1 Open economies, foreign debt and currency crises; 1.2 Household borrowing, debt default and banking crises; 1.3 Overleveraging, debt and debt deflation; 1.4 Plan of the book; Part I The non-linear dynamics of credit and debt default; 2 Currency crisis, credit crunches and large output loss; 2.1 The emergence of currency crises; 2.2 Some stylised facts; 2.3 The Krugman model: an MFT representation.

2.4 Sectoral budget equations and national accounts2.5 Flexible exchange rates: output and exchange rate dynamics; 2.6 Fixed exchange rates and the emergence of currency crises; 2.7 International capital flows: adding capital account dynamics; 2.8 Conclusions; 3 Mortgage loans, debt default and the emergence of banking crises; 3.1 Mortgage and banking crises; 3.2 A Keynes-Goodwin model with mortgage loans and debt default; 3.3 Excessive overconsumption and an attracting steady state; 3.4 Weakly excessive overconsumption and a repelling steady state.

3.5 Credit rationing, reduced consumption and the emergence of mortgage crises3.6 Monetary policy in a mortgage crisis; 3.7 Adding commercial banking; 3.8 Conclusions and outlook; 3.9 Appendix: some simulation studies of the baseline model; 4 Debt deflation and the descent into economic depression; 4.1 The debt deflation debate; 4.2 3D debt accumulation; 4.3 4D debt deflation; 4.4 KMG real business fluctuations: the point of departure; 4.4.1 The basic framework; 4.4.2 The 3D Rose type wage-price dynamics; 4.4.3 The 2D Metzlerian quantity dynamics and capital stock growth.

4.4.4 Putting things together: the KMG growth dynamics4.5 Feedback-motivated stability analysis; 4.6 Debt deflation in the KMG framework; 4.6.1 Integrating debt financing of firms; 4.6.2 Enterprise debt dynamics in the KMG framework; 4.6.3 Analysis of the model; 4.7 Conclusions and outlook; Part II Theoretical foundations for structural macroeconometric model building; 5 Keynesian macroeconometric model building: a point of departure; 5.1 Introduction; 5.2 The real and the financial part of the economy; 5.2.1 The structure of the real part; 5.2.2 The structure of the financial part.

5.3 The structure of the economy from the viewpoint of national accounting5.3.1 The four sectors of the economy; 5.3.2 Gross domestic product, savings, investment and further aggregates; 5.4 The model; 5.4.1 Preliminaries; 5.4.2 Households; 5.4.3 Firms; 5.4.4 The government; 5.4.5 Quantity and price adjustment processes; 5.4.6 The dynamics of asset market prices and expectations; 5.4.7 External accounts and foreign country data; 5.5 The next steps; 6 Intensive form and steady state calculations; 6.1 Introduction; 6.2 The real and the financial structure on the intensive form level.

6.2.1 The real part of the economy.

Shows how the Keynesian approach to business cycles can be used to explain and understand the current financial crisis.

Includes bibliographical references and index.

English.

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