Bankruptcies Drive Economic Cycles: How Financial Assets Impact Society
The article presents a model that simulates how the economy works without relying solely on prices. It focuses on how money flows between different sectors and how bankruptcies can impact the business cycle. The model is simple and uses individual agents to simulate economic behavior. The results show that the business cycle is driven by the accumulation of financial assets and how this affects the real economy. Changing certain parameters can alter the nature of the business cycle.