Endogenous rho
Four channels push toward complements during booms, driving the Minsky trap.
Impact Score
Score Reasoning
- Importance
- Core spine result for Paper 3: four channels making rho endogenous drive the Minsky trap and business cycle dynamics. Without endogenous rho, the framework is static.
- Novelty
- The four-channel mechanism (specialization, financial tightening, regulatory relaxation, asset correlation) making rho endogenous is a new theoretical contribution. Sawtooth asymmetry derived rather than assumed.
- Quality
- Clear exposition of all four channels with economic intuition. Well-structured progression from mechanism to sawtooth dynamics. Good cross-links to Minsky trap.