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THE MINSKY MOMENT AS THE REVENGE OF ENTROPY
Published online by Cambridge University Press: 10 April 2019
Abstract
Considering macroeconomies as systems subject to stochastic forms of entropic equilibria, we shall consider how deviations driven by positive feedbacks as in a speculative bubble can drive such an economy into an anti-entropic state that can suddenly collapse back into an entropic state, with such a collapse taking the form of a Minsky moment. This can manifest itself as shifts in the boundary between the portion of the income distribution that is best modeled as Boltzmann–Gibbs and that best modeled as a Paretian power law.
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- Macroeconomic Dynamics , Volume 24 , Special Issue 1: Macroeconomic Modeling and Empirical Evidence in the Wake of the Crisis , January 2020 , pp. 7 - 23
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- © Cambridge University Press 2019
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