International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Financial Leverage Trap
Dr. Stasys Girdzijauskas, Andžela Mialik, Marius Dubnikovas

Recently yet larger attention is paid by economists to problems producing unstable financial situations. When latter economic crisis began, a part of economists understood, that the existence of economic crisis is a defect of the world economy system itself, the result of its imperfection. The cause of financial crisis is not some cosmetic economy defect, but a substantial feature of the system, maybe even its flaw, which rushes to experience recurrent shakes not only separate economies, but also all world economy system. Last decade research identified that “flaw” – two economical paradoxes, occurring as rising profitability and debt trap paradoxes. They occur only when markets become saturated. Ant the globalization keeps stimulating these processes. In the article the reader is introduced with the influence of market saturation and economical paradoxes on investment with financial leverage. It is showed, how logistical model highlights loan capital specific behavior, and the logistical growth dynamics of investment with a negative member.

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