Dirk Bezemer
University of Groningen, Faculty of Economics and Business, Faculty Member
- I am a full professor in the economics of financial development at Groningen University, with a PhD from the Universi... moreI am a full professor in the economics of financial development at Groningen University, with a PhD from the University of Amsterdam (2001). After post-doc research at Imperial College London, research officer at ODI and work as Adviser to DFID, I came to Groningen in 2004. Research Inspirations: Keynes, Schumpeter, Minsky. My central question: how does finance support investment and innovation leading to stable, sustainable and equitable growth? My approach: think in balance sheets, follow the money, understand institutions, use innovative data. I wrote a few dozen peer-reviewed articles, engage in policy advice and media contributions, organized symposia, give keynote and other talks, teach master students, supervise PhD projects. My work was supported by the Institute for New Economic Thinking. I am a memeber of the Sustainable Finance Lab. Welcome.edit
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This paper is the first study to conduct an econometric analysis of indigenous slavery in Africa. We distinguish indigenous slavery from export slavery and survey the literature in order to identify the factors that shaped its prevalence... more
This paper is the first study to conduct an econometric analysis of indigenous slavery in Africa. We distinguish indigenous slavery from export slavery and survey the literature in order to identify the factors that shaped its prevalence and its impact on Africa's long-term development. We present data collected from colonial records and utilize these in a statistical analysis. The results
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The replacement of wage-labour farms by family farms in Central and Eastern Europe during the transformation has been more limited than was initially expected. In this paper a formal framework is developed in order to analyse the... more
The replacement of wage-labour farms by family farms in Central and Eastern Europe during the transformation has been more limited than was initially expected. In this paper a formal framework is developed in order to analyse the behaviour of family farms and socialist-style farms in the presence of risk, given the typical post-socialist environment. Management incentives, ownership structure, lump-sum transfers and consumption choices are shown to have the potential to limit the size of family farms relative to socialist-style farms. The hypotheses are tested with survey data collected by the author in the Czech Republic.
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In this paper we explore the variety of monetary policy transmission channels in an agent-based macroeconomic model. We identify eight transmission channels and present a model based on Caiani et al. Caiani et al., 2016, extended with an... more
In this paper we explore the variety of monetary policy transmission channels in an agent-based macroeconomic model. We identify eight transmission channels and present a model based on Caiani et al. Caiani et al., 2016, extended with an inter-bank market. We then analyze model simulation results of interest rate shocks in terms of GDP and inflation for four of the transmission channels. We find these effects to be small, in line with the view that monetary policy is an weak tool to control inflation.
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The replacement of wage-labour farms by family farms in Central and Eastern Europe during the transformation has been more limited than was initially expected. In this paper a formal framework is developed in order to analyse the... more
The replacement of wage-labour farms by family farms in Central and Eastern Europe during the transformation has been more limited than was initially expected. In this paper a formal framework is developed in order to analyse the behaviour of family farms and socialist-style farms in the presence of risk, given the typical post-socialist environment. Management incentives, ownership structure, lump-sum transfers and consumption choices are shown to have the potential to limit the size of family farms relative to socialist-style farms. The hypotheses are tested with survey data collected by the author in the Czech Republic.
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The composition of private debt matters to the severity of post-2007 recessions. Using new data on four types of bank credit over 2000-2012 for 51 economies in OLS and Bayesian averaging models, we find that changes in the share of... more
The composition of private debt matters to the severity of post-2007 recessions. Using new data on four types of bank credit over 2000-2012 for 51 economies in OLS and Bayesian averaging models, we find that changes in the share of household mortgage credit in total credit before the crisis are significantly associated with recession depth and growth loss after the 2007 crisis. This finding is robust to a wide range of control variables and to the different responses across advanced and emerging economies. The evidence also suggests that mortgage growth combined with increasing bank leverage was particularly damaging to output growth. We discuss policy implications and future research.
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Does financial development increase income inequality? Ambiguous answers to this question to date may be due to over-aggregation. In data over 1990–2012 for 26 EU economies, we study the effects on income inequality of different... more
Does financial development increase income inequality? Ambiguous answers to this question to date may be due to over-aggregation. In data over 1990–2012 for 26 EU economies, we study the effects on income inequality of different components of financial development. We find that bank credit to real estate and financial asset markets, which increases the wage share of the Finance, Insurance and Real Estate (FIRE) sector, increases income inequality. Credit to non-financial business and for household consumption supports broader income formation, decreasing income inequality. There was a large shift of bank credit allocation since the 1990s, away from supporting investments by non-financial firms and towards financing capital gains in real estate and financial asset markets. Combined with our new findings, this ’debt shift’ helps to understand the growth of inequality.
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Non-technical summary The thesis of this paper is that the COVID-19 crisis creates opportunities for fundamental change towards a more sustainable economy, for two reasons: structural change in the economy and a change in public opinion.... more
Non-technical summary The thesis of this paper is that the COVID-19 crisis creates opportunities for fundamental change towards a more sustainable economy, for two reasons: structural change in the economy and a change in public opinion. The paper identifies how the COVID-19 crisis accelerates six processes of change that can be leveraged in policy making. With a focus on the Netherlands, it argues for activist government policy because of the tipping-point nature of the economic system in the crisis. Technical summary Structural change in the economy and a change in public opinion during the COVID-19 crisis jointly imply that government choices regarding investments, regulation and taxes can now create stronger synergies of cleaner economic growth and employment creation with ecological, social and financial sustainability. The paper details this for six areas, with examples taken from The Netherlands. High levels of private and (in some countries) public debt may become so unsusta...
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This review article assesses the legacy of Hyman Minsky on the occasion of two newly published books. It identifies two strands of research building on Minsky’s ideas and his research practice, which was eclectic. These two strands draw... more
This review article assesses the legacy of Hyman Minsky on the occasion of two newly published books. It identifies two strands of research building on Minsky’s ideas and his research practice, which was eclectic. These two strands draw inspiration from, respectively, a ‘Money View Minsky’ and a ‘Model Minsky’. They represent different ways of doing economics, and they highlight, respectively, the microeconomic and macroeconomic dimensions of the Minskian analysis. Their compatibility hinges on the contested issue of aggregation in the financial instability hypothesis. This paper presents reviews of the books, and it highlights the diversity and the tensions in interpretations of Minsky’s work.
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Financial innovation during the Great Moderation increased the size and scope of credit flows in the U.S. Credit flows increased both in volume and with regard to the range of activities and investments that was debt-financed. This may... more
Financial innovation during the Great Moderation increased the size and scope of credit flows in the U.S. Credit flows increased both in volume and with regard to the range of activities and investments that was debt-financed. This may have contributed to the reduction in output volatility that was the Great Moderation. We hypothesize that during the Great Moderation (i) growth in mortgage finance partly decoupled from fundamentals as measured by overall output growth and (ii) this allowed mortgages less to finance residential investment and more to finance spending on other GDP components. We document that the start of the Moderation coincided with a surge in bank credit creation (especially mortgage credit), a rise in property income, a rise in the consumption share of GDP, and a change in correlation (from positive to negative) between consumption and non-consumption GDP components (investment, export and government expenditure). In a multivariate GARCH framework, we observe unid...
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In most transition economies, agricultural reforms have led to the emergence of family farms and household food production and to the decline of corporate farms. This study explores the extent of that trend for the case of Lithuania based... more
In most transition economies, agricultural reforms have led to the emergence of family farms and household food production and to the decline of corporate farms. This study explores the extent of that trend for the case of Lithuania based on secondary information and primary survey data. The structure of corporate farms and links to the economic environment are explored. Specific
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Research Interests: Economics, Development Economics, Accounting, Economic Growth, Developing Countries, and 15 moreFood Production, Developing Country, Comparative Advantage, Agricultural Production, Income, Debt, Currency, Developed Countries, Empirical evidence, Industrial sector, Government Policies, Capital Market, Fixed Effects, Domestic market, and Domestic Markets
The share of domestic bank credit allocated to non-financial business declined significantly in EMU economies since 1990. This paper examines the impact of capital inflows on domestic credit allocation, taking account of (future) EMU... more
The share of domestic bank credit allocated to non-financial business declined significantly in EMU economies since 1990. This paper examines the impact of capital inflows on domestic credit allocation, taking account of (future) EMU membership. The study utilizes a novel data set on domestic credit allocation for 38 countriesover 1990
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... Shepherd, A. and Farolfi, S. 1999. Export Crop Liberalization in Africa: A Review , Rome: FAO. ... Poulton, C., Gibbon, P., Hanyani-Mlambo, B., Kydd, J., Nylandset Larsen, M., Maro, W., Osario, A., Tschirley, D. and Zulu, B. 2004. ...
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... Niger* Sao Tome and Principe Rwanda* Serbia and Montenegro Senegal* Sri Lanka Tajikistan* Tanzania*** Timor ... this study on World Development Indicators 2005 and the UN MillenniumDevelopment Goal ... to relate these measures to a... more
... Niger* Sao Tome and Principe Rwanda* Serbia and Montenegro Senegal* Sri Lanka Tajikistan* Tanzania*** Timor ... this study on World Development Indicators 2005 and the UN MillenniumDevelopment Goal ... to relate these measures to a country's progress towards the MDGs. ...
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Contacts and the way they are organized in di¤erent economic systemsmatter for the economy. In this paper we introduce the notion of Relational Capital to model contacts. Contacts are an input into sold output in our macro model based on... more
Contacts and the way they are organized in di¤erent economic systemsmatter for the economy. In this paper we introduce the notion of Relational Capital to model contacts. Contacts are an input into sold output in our macro model based on matching theory (Pissarides, 1990). We argue that the destruction of some contacts in search for better ones is an integral part of technological advancement. This destruction carries a negative externality on former business partners. Socialist economies restricted such creative destruction, which we argue lead to their increasing technological backwardness. This is our explanation of the output fall during (unrestricted) transition: the technological catch-up implied high levels of destroyed and replaced relational capital. This not only had high direct opportunity costs (more labor is used for the production of relational capital) but also led to a loss in overall relational capital. The basic model is used to simulate plausible transition paths ...
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This paper examines the recent decentralization of governance in Indonesia and its impact on local infrastructure provision. The decentralization of decisionmaking power to local jurisdictions in Indonesia may have improved the matching... more
This paper examines the recent decentralization of governance in Indonesia and its impact on local infrastructure provision. The decentralization of decisionmaking power to local jurisdictions in Indonesia may have improved the matching of public infrastructures provision with local preferences. However, decentralization has made local public infrastructures depend on local resources. Due to differences in initial endowments, this may result in the divergence of local public infrastructures in rich and poor jurisdictions. Using data from village-level panel surveys conducted in 1996, 2000, and 2006, this paper finds that (1) local public infrastructures depend on local resources, (2) decentralization has improved the availability of local public infrastructures, (3) local jurisdictions are converging to a similar level of local public infrastructure, and (4) to some extent, decentralized public infrastructures' provision reflects local preferences.
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Classical political economy was underpinned by a shared view of the economy as a circular flow. This begged the question of how the value of produce can exceed the value of factor inputs: the ‘Profit Puzzle’. In this paper we advocate an... more
Classical political economy was underpinned by a shared view of the economy as a circular flow. This begged the question of how the value of produce can exceed the value of factor inputs: the ‘Profit Puzzle’. In this paper we advocate an understanding of the Profit Puzzle as a monetary paradox arising from Say’s Law. We trace how Classical, Keynesian
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Este artículo muestra que los modelos macroeconómicos contables ayudaron a prever la crisis de crédito y la recesión económica, mientras que los modelos de equilibrio ubicuos en la formulación de política y la investigación de la... more
Este artículo muestra que los modelos macroeconómicos contables ayudaron a prever la crisis de crédito y la recesión económica, mientras que los modelos de equilibrio ubicuos en la formulación de política y la investigación de la corriente principal no. Explora los antecedentes intelectuales del enfoque contable como alternativa a la economía neoclásica y el ascenso y declive de los modelos de flujo de fondos durante la posguerra. Incluye estudios de caso actuales de ambos tipos de modelos y analiza por qué el enfoque contable se ha mantenido fuera de la corriente dominante. Hace recomendaciones constructivas para revisar los métodos de evaluación de la estabilidad financiera y aboga por una “contabilidad de la economía”
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We provide a literature overview of the linkages between Poverty Reduction Strategy Papers (PRSPs) and the Millenium Development Goals (MDGs) and use novel data to examine their relation. We find that introduction of a PRSP is associated... more
We provide a literature overview of the linkages between Poverty Reduction Strategy Papers (PRSPs) and the Millenium Development Goals (MDGs) and use novel data to examine their relation. We find that introduction of a PRSP is associated with progress in four of the nine MDG indicators we study. PRSP are effective in respect of implementing defined policies (immunization, school enrolment) but not broader measures of MDG achievement (mortality, literacy, gender equality). Less speedy PRSP development and better quality of formulated policy actions in a PRSP are both helpful in achieving child health targets. Setting clearly defined targets and indicators improves progress in education targets. We discuss these findings in the context of other PRSP assessments in the literature and propose future research avenues.
The aim of this paper is to explore the link between credit and output in the context of a developed transition economy. Salient credit market features of these economies are (i) credit market imperfections leading to constraints on... more
The aim of this paper is to explore the link between credit and output in the context of a developed transition economy. Salient credit market features of these economies are (i) credit market imperfections leading to constraints on growth and (ii) the rapidly growing importance during transition of their financial sectors (the insurance, pension funds and real estate sectors). We develop a framework of credit and output including separate measures for credit to the real sector and financial sectors and for credit constraints, taking account of the role of trade credit. In our empirical work we focus on the Czech Republic because of the level of its financial development and data quality. In VAR and ARIMA analyses we find that our disaggregated measures for credit flows are better predictors of nominal growth than traditional, aggregate measures.
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... Shepherd, A. and Farolfi, S. 1999. Export Crop Liberalization in Africa: A Review , Rome: FAO. ... Poulton, C., Gibbon, P., Hanyani-Mlambo, B., Kydd, J., Nylandset Larsen, M., Maro, W., Osario, A., Tschirley, D. and Zulu, B. 2004. ...
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... Niger* Sao Tome and Principe Rwanda* Serbia and Montenegro Senegal* Sri Lanka Tajikistan* Tanzania*** Timor ... this study on World Development Indicators 2005 and the UN MillenniumDevelopment Goal ... to relate these measures to a... more
... Niger* Sao Tome and Principe Rwanda* Serbia and Montenegro Senegal* Sri Lanka Tajikistan* Tanzania*** Timor ... this study on World Development Indicators 2005 and the UN MillenniumDevelopment Goal ... to relate these measures to a country's progress towards the MDGs. ...
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... of the financial system reforms in 1992–96 included inflation monitoring, minimising the budget deficit, solving the foreign debt problem, and the creation of a two-tier banking system (World Bank, 1997). In order to realise these... more
... of the financial system reforms in 1992–96 included inflation monitoring, minimising the budget deficit, solving the foreign debt problem, and the creation of a two-tier banking system (World Bank, 1997). In order to realise these priorities, the Bank of Albania committed itself to ...