Work detail

Identifying the Conditions of Instability in Macromodels of Financial Cycles

Author: Mgr. Aleš Zenáhlík
Year: 2017 - summer
Leaders: PhDr. Jaromír Baxa Ph.D.
Consultants:
Work type: Finance, Financial Markets and Banking
Masters
Language: English
Pages: 81
Awards and prizes:
Link: https://is.cuni.cz/webapps/zzp/detail/175567/
Abstract: The purpose of this thesis is to construct an endogenous macroeconomic model
explaining the cause of financial cycles and systemic instability based on the
financial instability hypothesis (FIH) published by Hyman Minsky (1982). FIH
maintains that capitalist financial systems have an inherent disposition to fi-
nancial instability because periods of economic prosperity encourage borrowers
and lenders to be increasingly reckless which in turn lead to the formation of
financial bubbles. The problem is approached by employing an adaptive expectations
model based on stylized facts from Kaldor’s and Kalecki’s models
with addition of behavioral equations implemented in an attempt to simulate
market expectations.

Partners

ČSOB
Deloitte
McKinsey & Company

Sponsors

CRIF