Implementation of the coefficient of electric power consumption in the region to correct GDP growth

Our study is based on the Minsky model. According to Minsky’s theory of financial instability, economic dynamics are substantially determined by how firms finance their capital investments. At the beginning of the upward stage of the business cycle, secured financing from own development funds tends to prevail. Then gradually, as sales grow, firms actively switch to external financing by borrowing from banks. In this case, elements of speculative financing or even Ponzi-financing are widely used, when new borrowings are needed to pay off existing debt. The process of increasing the share of speculative borrowing in total business financing leads to […]