Minsky is a genius. It is a mystery to me why he is so obscure. http://www.levy.org/pubs/wp74.pdf -------------------snip The Financial Instability Hypothesis
Abstract The Financial Instability Hypothesis (FIH) has both empirical and theoretical aspects that challenge the classic precepts of Smith and Walras, who implied that the economy can be best understood by assuming that it is constantly an equilibrium-seeking and sustaining system. The theoretical argument of the FIH emerges from the characterization of the economy as a capitalist economy with extensive capital assets and a sophisticated financial system. In spite of the complexity of financial relations, the key determinant of system behavior remains the level of profits: the FIH incorporates a view in which aggregate demand determines profits. Hence, aggregate profits equal aggregate investment plus the government deficit. The FIH, therefore, considers the impact of debt on system behavior and also includes the manner in which debt is validated. Minsky identifies hedge, speculative, and Ponzi finance as distinct income-debt relations for economic units. -raghu. On Jan 30, 2008 6:16 PM, Eugene Coyle <[EMAIL PROTECTED]> wrote: > Try http://www.levy.org/vdoc.aspx?docid=968 > > That's a paper by Randall Wray published by the Levy Institute several > weeks ago. I found it helpful. > > When I was just starting grad school Minsky came to speak. I'd never > heard of him and can't remember a thing.
