Household Debt and Housing Bubble: A Minskian Approach to Boom-Bust Cycles

Authors

Soon Ryoo, Adelphi UniversityFollow

Working Paper Number

2015-08

Publication Date

2015

Abstract

This paper examines macroeconomic dynamics of household debt and housing prices. Drawing on Minsky's insights into financial instability and cycles, our framework combines household debt dynamics with behavioral asset price dynamics in a Keynesian macro model. We show that endogenous boom-bust cycles can emerge through the interaction between household debt and housing price dynamics. The resulting long waves are combined with a Kaldorian model of short-run business cycles.

DOI

https://doi.org/10.7275/7271635

Recommended Citation

Ryoo, Soon, "Household Debt and Housing Bubble: A Minskian Approach to Boom-Bust Cycles" (2015). Economics Department Working Paper Series. 189.
https://doi.org/10.7275/7271635