Money, Banks and Finance in Economic Thought

Minsky-Kalecly connection in the age of securitization markets

Piacentini Paolo Mario, Università di Roma 'La sapienza'

In the last decades, capitalist systems have increasingly become dependent on financial factors and financial interests (‘financialization’). Diverse schools within a pluralist Post-Keynesian inspiration, laid the ground , in the recent years, for sensible approaches aimed at framing the interaction between the financial and real spheres in mature economies. The present paper aims at contributing to this literature by trying to highlight a possible, and central, line of linkage and synthesis, between the approaches founded upon the inspiration of the seminal contributions of M. Kalecki and H.Mynsy. We follow in this the suggestion made by Minsky himself, in a posthumously published paper (2013), where the implications and constraints arising from the consideration of the “Kaleckian way of looking at profits”, are admitted by Minsky himself as the preliminary background to the analysis of the “determinants of stability or even the viability of a financial structure”. When the role of Debt, as originator of additional purchasing power in the form of inside money, contributing to the enhancement of demand for profit realization and allowing for the financing of investments in excess of the availability or ‘internal’ funds, is duly introduced and appreciated , the ground is set for the passage from the ‘non-monetary’ setting, in Kalecki, for the profit determination as constrained by the basic income-expenditure accountings, to the analysis of the functioning of a capitalist economy, in which the fundamental role of the financial systems and financial innovations is fully stressed, as in Minsky. ‘Kaleckian’ conditions will appear, thus, as a basic ‘real foundation’ constraining size, growth and stability of the financial activity, and financial wealth . A ‘Kalecki in search of Minsky’, and a ‘Minsky in search of Kalecki’, as reciprocally complementary sources, will be ideally evocated through the references to their original contributions. Ref.: Minsky, H. P. (2013): ‘The Relevance of Kalecki: The Usable Contribution’, PSL Quarterly Review, 67(265), pp. 95-106.

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Keywords: Profits , growth, real-finance intercation

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