This paper theoretically studies the role of the financial system in promoting macroeconomic stability and growth. It also explains endogenously the development of the financial system as part of the growth process. The productive sector engages in R\&D activities, and finances its activities...

This paper proposes a conceptualization of business cycle fluctuations in which the role of financial conditions and nonlinear dynamics are explicitly incorporated. We highlight the role of investment demand in driving economic fluctuations, consider its endogenous dynamic interactions with...

The main purpose of this study is to explore the potential expansionary effect stemming from the monetization of debt. We develop a simple macroeconomic model with Keynesian features and four sectors: creditor households, debtor households, businesses, and the public sector. We show that such...

Since the Great Recession of 2007-9 the financialisation of the US economy has reached a watershed characterised by stagnant financial profits, falling mortgage debt and rising public debt. The reliance of households on the formal financial system appears to have weakened for the first time in...

Focussing on the long-run effects of 'financialisation' and increasing shareholder power in a simple Post-Kaleckian endogenous growth model, we examine the effects of increasing shareholder power on the demand regime, on the productivity regime, and on the overall regime of the model. Under...

This paper proposes a method to calculate undistributed profits, thus saving rates of non-financial firms using only the information given in their balance sheets. This allows us to analyze the saving behavior of non-financial firms even in the absence of their statement of cash flows, which...

Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC backing increases a startup's likelihood of reaching the right tails of the firm size and...

This paper analyzes the impact of public investment on private investment in panel of 116 developing countries between 1980 and 2006 using dynamic panel data techniques, finding a strong and robust crowding-out effect that seems to be the norm rather than the exception, both across regions and...

Access to external finance is a major obstacle for small and young firms; thus, providing subsidized credit to small and young firms is a widely-used policy option across countries. We study the impact of such targeted policies on aggregate output and productivity and highlight indirect general...

Government policies that attempt to alleviate credit constraints faced by small and young firms are widely adopted across countries. We study the aggregate impact of such targeted credit subsidies in a heterogeneous firm model with collateral constraints and endogenous entry and exit. A defining...