tag:blogger.com,1999:blog-2098432983500045934.post6500655937914033454..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: An economy that relies on debt for growthThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2098432983500045934.post-62040683303532307822016-01-17T15:39:26.801-05:002016-01-17T15:39:26.801-05:00The basic idea is that firms borrow to finance inv...The basic idea is that firms borrow to finance investment at a lover rate than the return on investment. This allows firms to service debt while making profits.<br /><br />That's the theory. Issues arise when other uses of debt are injected, or firms make poor decisions that are reinforced by imprudent lending, leading to the build up of malinvestment.<br /><br />Minsky explains this (in part anyway) In his theory of the financial cycle, which some think to be the basis of or ordinary business cycles as well as financial crises.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.com