How does it cope with an adverse shock?
Part 2 of "The I Theory of Money" explains debt run-ups and how endogenous risk arises from the (i) the Liquidity Spiral, and (ii) the Disinflationary Spiral. It also defines the (iii) Paradox of Prudence, it's relation to Keynes' Paradox of Thrift. These amplifications lead to endogenous (self-generated) systemic risk.
