The standard IS–LM model considers all types of financial assets, excluding money, as bonds. We construct a modified IS–LM model to better represent the characteristics of financial markets and investigate the stability of the economy. We present bank behavior explicitly and consider household portfolio preferences through the rate of return on financial assets. We build both static and dynamic models that incorporate the dynamic equation of monetary policy. In our model, an increase in the debt–capital ratio may have a negative impact on the profit rate and bring about the so-called “paradox of debt.” We indicate that factors such as the sensitivity of bank lending to the profit rate and the degree of substitutability between the household’s equity and money have a significant effect on the volatility of the profit rate and equity price. Particularly, the latter may lead to an unstable economy in the long run. We show that it is always possible for the economy to become unstable endogenously. The government and central bank must formulate loan regulations and adopt the appropriate monetary policy to stabilize the economy.

中文翻译：

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重新考虑IS-LM模型和货币政策的局限性：Tobin-Minsky模型

标准的IS–LM模型将所有类型的金融资产（不包括货币）视为债券。我们构建了改进的IS–LM模型，以更好地表示金融市场的特征并调查经济的稳定性。我们明确介绍银行的行为，并通过金融资产的收益率来考虑家庭投资组合的偏好。我们建立了包含货币政策动态方程的静态和动态模型。在我们的模型中，债务资本比率的增加可能会对利润率产生负面影响，并导致所谓的“债务悖论”。我们指出，诸如银行贷款对利润率的敏感性以及家庭资产与货币之间的可替代程度之类的因素对利润率和股票价格的波动性有重大影响。特别地，从长远来看，后者可能导致经济不稳定。我们表明，经济总是有可能内生地变得不稳定。政府和中央银行必须制定贷款法规，并采取适当的货币政策来稳定经济。