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Securitisation, wage stagnation and financial fragility: a stock-flow consistent perspective

Securitisation, wage stagnation and financial fragility: a stock-flow consistent perspective

Nikolaidi, Maria (2015) Securitisation, wage stagnation and financial fragility: a stock-flow consistent perspective. [Working Paper]

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Abstract

Securitisation and wage stagnation have been viewed as two main root causes of the global financial crisis. This paper develops a stock-flow consistent model that allows the investigation of the macroeconomic channels through which securitisation and wage stagnation can jointly affect financial fragility. Particular attention is paid to their role in enhancing a borrowing-induced expansion, a housing boom and an appreciation in the prices of mortgage-backed securities that are of temporary nature. The results from simulation experiments provide support to the view that the combination of risky financial practices with wage stagnation can increase the likelihood of financial instability in a macro system.

Item Type: Working Paper
Uncontrolled Keywords: securitisation; wage stagnation; financial fragility; stock-flow consistent modelling;
Subjects: H Social Sciences > H Social Sciences (General)
Faculty / Department / Research Group: Faculty of Business > Greenwich Political Economy Research Centre (GPERC)
Last Modified: 19 Nov 2015 15:17
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/14078

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