Learn more about the actions Yale University Press is taking. Since the mids, the American economy has been characterized by increasing turbulence—with periods of financial instability, inflation, and rising unemployment, and a marked slowdown in the pace at which living standards improve. Current economic theories—including orthodox monetarism and Keynesianism—cannot account for this turbulence. A respected economist presents here a new and pathbreaking financial theory of investment to explain the behavior of the American economy and offers a series of recommendations for stabilizing it.
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Publications Book Series May Minsky first wrote about the inherent instability of financial markets in the late s, and accurately predicted a transformation of the economy that would not become apparent for nearly a generation. In , interest in his work suddenly exploded as the financial press recognized the relevance of his analysis to the meltdown of the mortgage-backed securities market.
Indeed, in this book, first published in , Minsky examined a number of financial crises in detail, several of which involved similar financial instruments, such as commercial paper, municipal bonds, and real estate and investment trusts. More important, he explained why the economy tends to evolve in such a way that these crises become more likely.
Minsky insisted that there is an inherent and fundamental instability in our sort of economy that tends toward a speculative boom. Unlike other critical analyses of capitalist processes, which emphasize the crash, Minsky was more concerned with the behavior of agents during the euphoric periods. And unlike other analyses that blame "shocks," "irrational exuberance," or "foolish" policy, he argued that the processes that generate financial fragility are "natural," or endogenous to the system.
Stabilizing an Unstable Economy is Minsky's seminal work, and it has been reissued so that it may be broadly available to a new generation of economists, analysts, and investors. The book covers, among other topics, the effect of speculative finance on investment and asset prices; booms and busts as unavoidable results of high-risk lending practices; government's role in bolstering consumption during times of high unemployment; and the need to increase Federal Reserve oversight of banks.
Monetary Policy and Financial Structure. Hyman P. All Rights Reserved.
His research attempted to provide an understanding and explanation of the characteristics of financial crises , which he attributed to swings in a potentially fragile financial system. Minsky is sometimes described as a post-Keynesian economist because, in the Keynesian tradition, he supported some government intervention in financial markets, opposed some of the financial deregulation policies popular in the s, stressed the importance of the Federal Reserve as a lender of last resort and argued against the over-accumulation of private debt in the financial markets. Minsky's economic theories were largely ignored for decades, until the subprime mortgage crisis of caused a renewed interest in them. His mother, Dora Zakon, was active in the nascent trade union movement. In , Minsky received his B. Minsky taught at Brown University from to , and from to was an Associate Professor of Economics at the University of California, Berkeley. He was a consultant to the Commission on Money and Credit — while at Berkeley.
Hyman Minsky on Stabilizing an Unstable Economy – On The Nighttable…
Stabilizing an Unstable Economy