Speculative capitals and demand pull below full employment

Angel Asensio CEPN, University Paris 13 This draft, 22 October 2011

Abstract

In a series of papers published in The Time in 1937, while the rate of unemployment was around 12% in the UK, Keynes expressed his concern with potential inflationary pressures owing to the government proposal to finance rearmament partly by means of borrowed money. The topic still was the central purpose in 1940 of his How to pay for the war: "Some means must be found for withdrawing purchasing power of the market; or prices would rise until the available goods are selling at figures which absorb the increased quantity of expenditures – in other words the method of inflation." This suggests, in accordance with Minsky's views, that a demand pull inflation may develop in Keynes's theory, in spite of unemployment, as a result of an excess "purchasing power" due to the banking system financing of expenditures that eventually prove unable to generate the revenues required for the debt repayment and for the withdrawal of the related amounts of purchasing power. Based on Keynes and Minsky arguments, the paper examines whether/how the financing of bad debts on a large scale - instead of rearmament - is capable of moving inflationary forces from asset markets (where they remained confined in the aftermath of the 2008 financial crisis) to the whole , thereby triggering a demand pull inflationary process in spite of strong unemployment.

1. Introduction

The asset prices recovered rapidly in the aftermath of the 2008 financial crisis, partly because the Fed managed so that transactions could be made at increasing prices by providing the financial sector with the huge amounts of money it demanded at very low interest rates, and partly because authorities have been implementing the new prudential regulations rather smoothly in Europe and the US, so that unbridled speculative finance seems not to have been dissuaded severely. Hence, if one considers the recovery in the market valuation of assets since the financial collapse of 2008, the rapid 2009-2010 recovery of most financial institutions in developed countries (in comparison with the weakness of economic recovery) and the rapid comeback of big profits, one is led to the conclusion that the unsustainable trends of the pre crisis period have not been totally fought, which unfortunately is corroborated by the threats that are still hanging on international finance in relation to the so called "sovereign debt problem".1

1 The asset prices reflation mainly worked indirectly, but some central banks also have bought financial assets directly: "The measure adopted by the ECB have lead to an increase in its balance sheet higher than 45% between September 2008 and January 2009. These measures hitherto sought to increase the interbank market liquidity while other central banks also sought to influence some financial assets prices (public or private) through their purchases (Fed, Bank of England, Bank of Japan)." (translated from DGTPE, Lettre Trésor-Eco, n°56, Avril 2009, p 1). The 2009 recovery in financial markets has been documented for example by the IMF (Global Financial Stability Report, Market Uptdate, January 2010). 1

On the other hand, oil and raw material prices have been showing an increasing trend for months, so that central banks and commentators have been watching out for a possible return of inflation, although hitherto there was not significant signals of consumer price increases in advanced countries. The international financial system furthermore is still fragile, so that one may wonder whether the combined effects of higher financial uncertainty, of less optimistic expectations with respect to the financial assets future returns and of the progressive impact of the new regulations could divert significant amounts of speculative capitals from the financial market. As, in this case, speculative capitals would seek for investment in real assets and durables goods, this raises the question of whether the 'capital market inflation' could propagate beyond the financial sector.2 According to The General Theory, inflation is rather expected to develop in conditions of full employment, for, below full employment, prices increases are usually a short run by- product of output increases in the presence of decreasing returns, which is not what Keynes called 'true inflation'. Chick (1983) nevertheless pointed out that "there is nothing in [The General Theory] which actually impedes understanding of the conjunction of unemployment and inflation" (Chick 1983, p 280). And as a matter of fact, in a series of papers published in The Times in 1937, while the rate of unemployment was around 12% in the UK, Keynes expressed his concern with potential inflationary pressures owing to the government proposal to finance rearmament partly by means of borrowed money. The topic still was the central purpose in 1940 of his How to pay for the war: "Some means must be found for withdrawing purchasing power of the market; or prices would rise until the available goods are selling at figures which absorb the increased quantity of expenditures – in other words the method of inflation." (CW, vol.9, p. 378). This suggests that a demand pull inflation may develop in Keynes's theory, in spite of unemployment, as a result of an excess "purchasing power" due to the banking system financing of expenditures that eventually prove unable to generate the revenues required for the debt repayment and for the withdrawal of the related amounts of purchasing power. Such a kind of financing can be said to produce "excess money".3 The argument rejoins Hyman Minsky views on the causes of inflation: "Inflation is, first of all, the result of financing too many claims on the supply of consumer goods at the inherited prices. Any restriction on the supply of consumer goods –such as occurs in wartime or as the result of a drought— or any expansion of incomes that will be available to finance the demand for consumer goods, without any concomitant increase in the supply, will lead to rising prices." (Minsky 1986, p 261)

2 "There is no doubt that investment in financial derivatives markets for agricultural commodities increased strongly in the mid-2000s, but there is disagreement about the role of financial speculation as a driver of agricultural commodity price increases and volatility. While analysts argue about whether financial speculation has been a major factor, most agree that increased participation by non- commercial actors such as index funds, swap dealers and money managers in financial markets probably acted to amplify short term price swings and could have contributed to the formation of price bubbles in some situations. Against this background the extent to which financial speculation might be a determinant of agricultural price volatility in the future is also subject to disagreement. It is clear however that well functioning derivatives markets for agricultural commodities, could play a significant role in reducing or smoothing price fluctuations – indeed, this is one of the primary functions of commodity futures markets." ("Price Volatility in Food and Agricultural Markets: Policy Responses", Policy report to G20 coordinated by the FAO and the OECD, June 2011, p 12) 3 Clearly, excess money here does not refer to an excess of the supply over the demand for money, which would be inconsistent with the Post Keynesian approach to endogenous money. 2

This paper examines whether/how the financing of unproductive bad debts on a large scale - instead of rearmament - is capable of moving inflationary forces from asset markets (where they remained confined in the aftermath of the 2008 financial crisis) to the whole economy, thereby triggering a demand pull inflationary process below full employment. It is argued that enforced prudential regulation alone would not suffice. A demand pull inflation process requires the supply of goods to be inelastic. Arguably this could happen because of the combined effects of productive capacity destruction and of sluggish investment in the wake of the economic depression. Section 2 considers how the banking system was led to endogenously provide the economy with an excess money by means of bad debts financing. Section 3 deals with the topic in the formal term of an "equation of exchange" which captures the transactions on existing assets besides the transactions in the current output. Section 4 discusses how excess money could fuel inflation and section 5 considers the supply-side condition for a demand-pull inflationary pressure being able to effectively degenerate into inflation below full employment.

2. Easy money, capital market inflation and the making of (endogenous) excess money

In a safe economic context, money quantity increases do finance income-generating projects that enable future repayments and money withdrawing. In the current context however, large amounts of money have been endogenously created which did not finance additional but, instead, fed the housing and financial assets prices beyond sustainable trends. Assets inflation is basically unsustainable when it rests on the illusion that assets will deliver returns that they eventually will not deliver. As Minsky put forward, such a process can hold for a while, insofar as authorities, by means of easy money, allow for the validation of the extra profits attached to the optimistic valuation of assets. The value of assets suddenly collapses, be it caused by an endogenous increase in the rate of interest (as suggested by Minsky) or caused by a slump in the expected return on capital (as Keynes suggested), when markets understand that assets will not deliver the optimistic return that was expected. After the crisis, part of the money amounts that had refinanced unsustainable debts on the basis of optimistic revenue expectations still circulates, since the full repayment of debts proves to be impossible, so that the related money withdrawal which should have occurred in safe financial circumstances did not operate eventually, or operated only partially through the forced liquidation of assets of excessively indebted agents . Authorities also have pumped huge amounts of high-powered money in exchange of bad debts when they rescued the financial system. Banks therefore have accumulated lots of reserves at low cost. Although authorities claim that they are withdrawing all the excess liquidity without trouble, there is some doubt left, for most of this liquidity has been pumped in exchange of public debts that governments will hardly be able to repay completely before long, due to the sovereign debt turmoil. Furthermore, even if all the public debts could easily be sold, the pumped high-powered money nevertheless has operated as an indirect massive validation of private bad debts, since it allowed the whole financial system to continue pricing much of them, although at a lower value. As a matter of consequence, banks did not register the full sanction of the pre-crisis easy money policy, and, although the high powered money did not produce any mechanistic "multiplier" effect on the money quantity, since it has been largely hoarded by banks, it has worked as an a posteriori validating process, by which more money remains circulating than the amount that should be circulating if the private debts had been totally repaid. The outcome is an excess purchasing power in the economy.

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Keynes (1940) dealt with such an excess money, though in the specific context of WWII. As quoted in the introduction above, his focus was on the excess purchasing power induced by the money earnings distributed to workers that produced arms instead of commodities. He was then seriously concerned with the problem of potential inflation. In a context much closer to the current situation, Minsky (1986) pointed out the inflationary pressures owed to the huge amounts of liquidities that must be pumped into the capitalist system in order to avoid or get out of a great depression.4

"Historically, an extremely robust financial system, dominated by hedge finance and with a surfeit of liquid assets in portfolio, is created in the aftermath of either a wave or a traumatic debt deflation and deep depression. Experience since the mid-1960s shows that massive government deficits and Federal Reserve lender- of-last-resort intervention increase the robustness the financial system. That is, in the modern economy the job that was done by deep depressions can be accomplished without the economy going through the trauma of debt deflation and deep depression. However, the government deficit and lender of last resort interventions that abort the consequences of fragile financial structures lead in time to inflation. Inflation enables firms, households, and financial institutions to fulfill commitments denominated in dollars that they could not fulfill at stable prices." (Minsky 1986, p 215)

In recent years, oil and raw materials prices shown somewhat increasing trends, with the result that central banks and commentators have been watching out for a possible return of inflation.5 Yet sustained inflation has not been observed hitherto in the developed countries severely damaged by the 2008 financial crisis. Inflationary signals furthermore seem to have been concentrating mainly in emerging countries like Brazil, India and China, which recovered quite rapidly after the world financial collapse, while there was no significant signals of consumer price increases in the U.S.A, nor in Europe, excepted maybe in the UK (but no long-term price increases were still expected according to BOE's June 2011 Quarterly Bulletin). Several reasons can be put forward. First, part of the excess money has been absorbed by an increase in the liquidity preference and money holding, owed to the fear triggered by the financial collapse. A second powerful factor is that money owners promptly returned to the still lightly-regulated capital markets, thereby fueling asset-prices inflation again, although to a lesser extent.6 But, when the cleaned up financial system regains the public confidence (maybe after another financial collapse, given the sovereign debt problem), so that the excess money no longer is absorbed by the above provisional effects, holders should seek to substitute real assets and goods for money and for less attractive financial assets, which could trigger

4 According to Keynes's How to pay for the war, the excess purchasing power that had resulted from financing rearmament could be withdrawn without harming employment, while Minsky looks more defeatist, as he was mainly concerned with structurally fragile financial systems and the necessity of validating bad debts to avoid severe instability. 5 "Overall, inflation risks have been driven up by the combination of dwindling economic slack and increases in the prices of food, energy and other commodities." (BIS, annual report 2011, p xii). 6 Another reason is that part of the excess money flowed outside the U.S.A, as a result of international payments and exchange rate management, notably to China where, owing to inflationary pressures, the adopted a restrictive policy. 4

inflationary pressures beyond capital markets (not necessarily inflation, as restrictive policies might seek to repress them).

3. Capital market inflation and the flow supply price of goods in the right equation of exchange

The story above can be stated formally by means of the "equation of exchange", provided the definition of the transactions does not overlook the stock of existing goods and assets (variable A), besides the flow supply of goods and services (variable Q):7

MV=PT=PQQ+PAA

Remark. V is not the income-velocity of money, since it does not apply to the sole aggregate income, but to both the flow supply of goods and the value of the stock of durables goods and assets.8

It is obvious, according to the duly extended equation of exchange, that it is possible for an increase of the money quantity to go far beyond the speed of nominal income (PQQ), even with a constant "wealth-velocity" of money, provided the money value of assets (PAA) is allowed to increase accordingly.

It is also possible to see why the flow supply price (PQ) did not raise strongly in spite of the collapse of financial markets (decrease in PAA) and of the recession (decrease in Q). The reason is the strong decrease in the "wealth-velocity" of money owed to increased uncertainty and liquidity preference. It is straightforward to see, as the quantity of money is equal to PT/V and is also equal to the money demand, that PT/V is equal to the money demand, which according to Keynes theory depends on the terms L1 and L2:

M = PT/V  PT/V = L1(PQQ) + L2(r)

Hence, the "wealth-velocity" of money is a function of the liquidity preference function L2.

V = PT/[L1(PQQ)+L2(r)]

7 When PT is assimilated to PQQ, it is implicitly assumed that money only serves to buy the flow- supply of goods, a very unrealistic –though usual- assumption. 8 "(... ) for the income-velocity of money merely measures what proportion of their incomes the public chooses to hold in cash, so that an increased income-velocity of money may be a symptom of a decreased liquidity-preference. It is not the same thing, however, since it is in respect of his stock of accumulated savings, rather than of his income, that the individual can exercise his choice between liquidity and illiquidity. And, anyhow, the term 'income-velocity of money' carries with it the misleading suggestion of a presumption in favour of the demand for money as a whole being proportional, or having some determinate relation, to income, whereas this presumption should apply, as we shall see, only to a portion of the public's cash holdings; with the result that it overlooks the part played by the rate of interest." (Keynes, 1936, p 194). 5

As a matter of consequence, a positive shift of L2 (given the rate of interest), that is an increase in the liquidity preference aimed at preserving savings from increased uncertainty, produces a decrease in V.

But when the depression ends and the economy is stabilized or starts recovering, which supposes that the financial system has regained the public confidence, the liquidity preference normally returns towards the pre-crisis level (though maybe to a higher level because of the lasting difficulties the crisis has generated), while the transaction motive adjusts to the depressed level of the economic activity. Hence, assuming that V and Q are not much higher than their pre-crisis level, while PAA is substantially lower, the equation of exchange yields an increase in the price of the flow-supply of goods. Of course, capital market inflation might continue absorbing excess money for a while, but a transmission to the good markets is a possible outcome, especially if the enforcement of the prudential regulation get to reduce the market valuation of assets strongly enough for speculative capitals becoming less attracted by the financial assets.

4. How (endogenous) excess money could fuel inflation

The possibility for the money quantity to have a positive effect on prices is not inimical to Keynes's views on inflation in The General Theory:

"The view that any increase in the quantity of money is inflationary (unless we mean by inflationary merely that prices are rising) is bound up with the underlying assumption of the classical theory that we are always in a condition where a reduction in the real rewards of the factors of production will lead to a curtailment in their supply" (Keynes 1936, p. 304).

There are many things in this quotation, but let us emphasize two ideas comprised in the first part of the sentence (before "is bound up..."): i) the quantity of money does affect the price of goods and ii) an increase in the quantity of money may increase the price of goods without being inflationary, which also means that, conversely, inflation may (although it need not) be caused by an (excess) increase in the quantity of money. Regarding the difference between inflation and rising prices, it is well known that increasing prices of goods and services are the normal consequences of any increase in aggregate demand and output under conditions of decreasing factor productivity (in the short run). It goes along with a decrease of the real factors costs, provided the factors rewards are not increased simultaneously in the same proportion. This, according to Keynes, is not true inflation. True inflation starts when workers would curtail their supply of labour if the prices increase was not compensated by a proportional increase in wages. As workers are more likely to be able to impose wage indexation when the economy is working at full employment, for the wage increase must compensate for inflation if entrepreneurs do not want to suffer a curtailment in their labour force, it is rather in such a context that Post Keynesians usually consider the possibility that a demand-pull inflation process becomes 'true inflation'.9

9 'When a further increase in the quantity of effective demand produces no further increase in output and entirely spends itself on an increase in the cost-unit fully proportionate to the increase in effective demand, we have reached a condition which might be appropriately designated as one of true inflation.' (Keynes, 1936, p 303). 6

Minsky nevertheless argued that "open inflation" had been triggered below full employment during the late 1960s, 1970s and early 1980s as "defensive or institutionalized reactions to profit generating government deficits that result in rising markups and price increases during recessions" (Minsky 1986, p 261). Actually, according to the Post Keynesian literature, inflation may develop before full employment as a result of a conflict over the distribution of income or of an increase in the price of imported resources like oil (Davidson 1994, p 143).10 Interestingly, Minsky insisted on the role of finance in allowing for the income distribution conflict to degenerate in inflation. 'Open inflation' occurs "when markets conditions are conducive to rising money wages". When increases in money wages are financed, the result is "too many claims on the supply of consumer goods" at inherited prices.11 This emphasizes that inflation results from the conflict of financed claims over consumer goods. Inflation therefore means that money has been endogenously supplied which allowed firms to pay higher nominal rewards to the previously hired factors instead of financing more factors and additional output capacity.12 In Minsky's words, "this view is in sharp contrast to the simple assertions that inflation is everywhere a monetary phenomenon, or is caused by government, or is the result of wage increases exceeding productivity increases. Both monetary and the wage productivity phenomena occur in observed ; both are parts of the inflation process, but they are neither the originating nor the entire mechanism. Furthermore, controlling the or money wages only addresses symptoms, not causes, of the inflation disease." (Minsky 1986,p 265-66]. Regarding now the causes of demand pull inflation, it is worth noticing that, as a consequence of endogenous money, the causal relationship between the effective demand and the money supply is reversed in the Post Keynesian approach, as compared with the monetarist approach:

"In our economy, the causal chain that leads to inflation starts with rising investment or government spending, which leads to increases in markups; an increase in the money supply or in money velocity is associated with the rise in investment or government spending. Investment demand rests upon the availability of financing. As the supply of financing through banks is responsive to demand, the money supply changes to accommodate the activities that determine the demand for financing." (Minsky 1986, p 256)

10 An increase in the price of import also is a mark of income distribution (international) conflict, and, as far as taxes take part of the production cost, inflation can also be related to a private/public conflict over the distribution of income. 11 "Money wage increases negotiated in collective bargaining can be realized only if the increase is financed." (Minsky 1986, p 282) 12 It transpires that 'inflation in the flow-supply prices of producibles is everywhere and always a rise in somebody's income' (Davidson 1994, p 143), so that there is a cost side in any demand-pull inflation story, since an initial demand stimulus, provided it is accommodated by banks, goes along with a more intensive use and demand for labour and capital, which offers opportunities for increasing the rewards of such and such category (depending on their relative power). But there is also a demand side in any cost-push inflationary process, for an initial cost push can hardly lead to an inflationary process if monetary authorities aim at repressing it by means of a restrictive policy that depresses the effective demand. Whatever the initial cause is a cost push or a demand pull, both the costs and the effective demand are necessarily involved, as well as the distributive conflict.

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Hence the causal relation is:

demand expansion --> money accommodation --> rising prices or inflation instead of

money supply --> demand expansion --> inflation

Some additional arguments might be necessary here, for increased demand does not produce true inflation necessarily, even at full employment. Indeed, as far as wages increase along with the productivity gains and the normal repayment of inherited debts is assured, firms do not need prices increase to validate debts. Things turn out difficult when the financed investments do not deliver enough revenues in time as to repay the debts. In this case, firms cannot but validate their debts by means of inflation, provided monetary authorities do not counter them.13 According to this Minskyan approach, the Fed's increasing policy stopped the validation of private debts which led to the 2007-2008 crisis.

"Furthermore, if an economy with a sizeable body of speculative financial units is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make position by selling out position. This is likely to lead to a collapse of asset values." (Minsky 1992, p 8)

Since part of the bad debts therefore turned out unrecoverable, amounts of money remained circulating which would have been withdrawn in a safe financial context. Asset prices recovered subsequently, for the support authorities provided to the financial sector encouraged capitals to stay in financial markets, but it costed a severe downgrading of public finances and of central bank balance sheets, since they absorbed parts of the bad assets. The worsening of sovereign debt problems in the mid of 2011 and the Dexia episode showed that difficulties only had been transformed: the rise of public debts, which were directly and indirectly caused by the crisis, led private institutions to hold public debts the rating of which gradually worsened. Banks rating then downgraded and market anxiety grew, so that the capacity of capital markets to continue absorbing excess money still was questionable.

5. Looking at the supply side

So far, we have identified a kind of demand-pull "mechanism" which can transmit inflation from assets to the flow-supply price of goods, and thereby to the whole economy. A further condition however is required for the mechanism to become effective below full employment. The condition lies in the supply side of the goods market, for demand expansion cannot degenerate into inflation when aggregate supply is amenable to the production of the demanded goods at current prices. This brings back to the problem Keynes (1930) dealt with

13 "Inflation, which increases nominal cash flows, can become a policy instrument to validate debt." (Minsky 1986, p. 170). 8

in terms of commodity or capital inflation, when spot prices increase relative to flow-supply prices14. In normal circumstances, such a discrepancy between spot and flow-supply prices sends a signal to producers in such a way that the production is reduced when the spot prices are below the flow-supply prices (a contango), while it is increased in the reverse case (backwardation). In both cases, the spot price eventually rejoins the flow-supply price, so that only temporary capital inflation/deflation arises, but as Davidson (1994, p. 143) suggested, though he did not discuss the possible reason, spot price "can affect [...] changes in flow- supply prices" and thereby produce what Keynes called 'income inflation'. A reason why, in the current context, the normal process of backwardation might fail and eventually induce an increase in the flow-supply prices is that, if/when speculative capitals are diverted from financial markets and look for higher returns in durables, raw material and other speculative goods, producers of these goods will hardly be able to provide within normal delays the amounts that would be necessary to absorb the additional purchasing power at current supply prices. Indeed the corresponding capacity of production did never exist, since much money fed the demand for housing and financial assets, not the demand for a flow- supply of goods.15 Therefore, expectations of future increases of the flow-supply prices are likely to feed precautionary and speculative demand in the spot markets, all the more since the combined effects of productive capacity destruction and sluggish investment in the wake of the economic depression are likely to make things even worse.16

References

Bank for International Settlements, 81st annual report 2011. Chick V., 1983, Macroeconomics after Keynes, MIT Press Cambridge, Massachusetts. Davidson, P. 1994, Post Keynesian Macroeconomic Theory, Edward Elgar.

14 See Davidson 1994, p. 142 15 M. Hayes (2006, p 211-213) also suggests a "theoretical link between the quantity of money and the price-level of output, via liquidity-preference and the liquid capital-goods employed in production, which does not assume full employment". According to the author, "[...] stocks of liquid capital-goods may come to command a liquidity premium under conditions of uncertainty and low money interest rates", which increases the demand for those stocks of liquid-capital goods as a hedge against possible "losses through price volatility and disruption in production, as a result of shortages of capital-goods at particular point in the supply chain". Note that, again, the reason why a 'backwardation' of the (spot) prices of those stocks of capital-goods would not operate is not discussed. But above all, there is an important difference with respect to the inflationary process under consideration in the present paper, since in Hayes mechanism "the quantity of money has no direct significance here; the shift in the hierarchy of liquidity-preference arises from the low rate of interest on money". 16 "The downturn has permanently reduced the level of potential output. For the OECD as a whole, potential output is estimated to be around 2½ per cent lower in 2012 when compared with projections made prior to the crisis. This represents a loss of more than a year’s growth for the region as a whole. Underlying the loss are reductions in capital endowment as firms have adjusted to the end of cheap financing and increases in long-duration unemployment resulting in hysteresis-type effects leading to higher structural unemployment." OECD, economic outlook n° 89, p 228). See also IMF World Economic Outlook 2009, p 31-33.

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Davidson, P., 2006, Can, or should, a central bank inflation target?, Journal of Post Keynesian Economics, 28, 689-703. Direction Générale du Trésor et de la Politique Economique (DGTPE), Lettre Trésor-Eco, n°56, Avril 2009. FAO – OECD, 2011, Price Volatility in Food and Agricultural Markets: Policy Responses, Policy report to G20, June. Hayes M., 2006, The economics of Keynes, A new guide to The General Theory, Edward Elgar. International Monetary Fund, 2010, Global Financial Stability Report, Market Uptdate, January. International Monetary Fund, 2009, World Economic Outlook. Keynes, J.M. 1930, A Treatise on Money, in The Collected Writings of , vols. 5-6, London: Macmillan, 1971. Keynes, J.M. 1933, The means to prosperity, in The collected writings of John Maynard Keynes, vol. 9, Macmillan Press, 1972. Keynes, J.M. 1936, The general theory of employment, interest and money, London, Macmillan. Keynes, J.M. 1937, How to avoid a slump, in The collected writings of John Maynard Keynes, vol. 21, Macmillan Press, 1982. Keynes, J.M. 1937, Borrowing for defence : is it inflation? A plea for organised policy, in The collected writings of John Maynard Keynes, vol. 21, Macmillan Press, 1982 Keynes, J.M. 1940, How to pay for the war, in The collected writings of John Maynard Keynes, vol. 9, Macmillan Press, 1972. Minsky, H. P., 1986, Stabilizing an unstable economy, Yale University Press. Minsky H.P. , 1992, The Financial Instability Hypothesis, working paper, The Jerome Levy Economics Institute of Bard College, n°74. OECD, 2011, Economic Outlook n° 89, preliminary version.

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