Financial Keynesianism and Market Instability

Economics Working Paper Archive from Levy Economics Institute

Abstract: In this paper I will follow Hyman Minsky in arguing that the postwar period has seen a slow transformation of the economy from a structure that could be characterized as "robust" to one that is "fragile." While many economists and policymakers have argued that "no one saw it coming," Minsky and his followers certainly did! While some of the details might have surprised Minsky, certainly the general contours of this crisis were foreseen by him a half century ago. I will focus on two main points: first, the past four decades have seen the return of "finance capitalism"; and second, the collapse that began two years ago is a classic "Fisher-Minsky" debt deflation. The appropriate way to analyze this transformation and collapse is from the perspective of what Minsky called "financial Keynesianism"—a label he preferred over Post Keynesian because it emphasized the financial nature of the capitalist economy he analyzed.

Keywords: Hyman Minsky; Fisher-Minsky Debt Deflation; Hilferding; Finance Capitalism; Money Manager Capitalism; Financial Keynesian (search for similar items in EconPapers)
JEL-codes: B22 B25 B26 B52 E02 E11 E12 E44 G01 G18 G20 G21 (search for similar items in EconPapers)
Date: 2011-03
New Economics Papers: this item is included in nep-hme, nep-hpe and nep-pke
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Citations: View citations in EconPapers (2)

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