This study presents a simple model of corporate debt dynamics within the framework of
the post-Keynesian theory of growth and distribution. Our model introduces corporate debt
dynamics into a modified version of Lavoie’s Minsky–Steindl model, yielding long-run
results different from those of Lavoie (1995) and Hein (2007) by showing that a stable
long-run equilibrium exists in both puzzling and normal cases. On the basis of these results,
this study shows that Minsky’s financial instability as well as Steindl’s paradox of debt as a
phenomenon of macroeconomic instability can be formulated within the framework of a
post-Keynesian debt dynamics system.