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The Limits of Minsky’s Financial Instability Hypothesis as an Explanation of the Crisis

Posted By Imprensa On 16 fevereiro, 2010 @ 7:56 pm In Desenvolvimento,Destaques da Semana,Internacional,Política Econômica | No Comments

By Thomas I. Palley

In this paper the author argues that the interpretation of the financial crisis as a Minsky crisis is misleading, as the processes identified in Minsky’s financial instability hypothesis, even when playing a critical role in the crisis, are part of a larger economic drama involving the neoliberal growth model. Interpretation of the financial crisis as a purely financial crisis–in the spirit of a pure Minsky crisis–and the attendant policy prescription of simply fixing the financial system may, in fact, worsen stagnation.

Link: http://www.networkideas.org/featart/dec2009/Minsky.pdf ^[1]

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[1] http://www.networkideas.org/featart/dec2009/Minsky.pdf: http://www.networkideas.org/featart/dec2009/Minsky.pdf

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