Keen Behavioural Finance 2011 Lecture 10 Financial Instability Hypothesis Part 2

[dilorybark]

What are the names of the Fama & French papers (1997 & 1998)?

[PetrovCyr1234]

So K to Y relation can't be as straigtforward and be modelled by a constant.

[PetrovCyr1234]

Great model, but how to make sense of Aggregate demand being greater than GDP (Y)? That would mean that the Invesment loans newly created would more than exhaust (in a given period) the Investment share of Y and would merely accumulate as financial assets (incl. bank balances) , which are therefore to be counted in the capital stock. Only in the later later periods can such financial assets be converted into the stock of real capital impacting Y.