Date of Award

6-15-2024

Document Type

Masters Thesis

Degree Name

M.A. in Economics

Organizational Unit

College of Arts Humanities and Social Sciences, Economics

First Advisor

Yeo Hyub Yoon

Second Advisor

Jonathan Sciarcon

Third Advisor

Markus Schneider

Fourth Advisor

Robert Urquhart

Fifth Advisor

Daniel Ossa

Keywords

Financial stability, Global financial crisis, Long-wave cycle theory, Minsky cycles, Stress testing

Abstract

This thesis develops a theoretical framework that attempts to explain the dynamic interactions that lead to episodes of severe financial instability. Adapting Minsky’s Financial Instability Hypothesis to the specific characteristics of financial intermediaries and building on Ferri and Minsky’s ideas regarding the role of thwarting institutions, I propose that financial fragility is the result of a long-wave cycle in financial relations characterized by significant institutional and structural evolution within the U.S. financial system. This evolution results in a preponderance of financial activity undertaken outside the regulatory umbrella while margins-of-safety are eroded, newly innovated financial assets proliferate, and financial intermediaries become more interconnected. The framework generates predicted empirical patterns of variables associated with these characteristics that are compared to empirical evidence from the Global Financial Crisis (GFC). Policy implications of the theoretical construction and empirical exercise are discussed in the context of the reconstructed regulatory framework which has accompanied the GFC.

Copyright Date

6-2024

Copyright Statement / License for Reuse

All Rights Reserved
All Rights Reserved.

Publication Statement

Copyright is held by the author. User is responsible for all copyright compliance.

Rights Holder

Shaun K. Brog

Provenance

Received from ProQuest

File Format

application/pdf

Language

English (eng)

Extent

111 pgs

File Size

977 KB

Available for download on Wednesday, August 13, 2025



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