Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/56960 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 582
Publisher: 
Levy Economics Institute of Bard College, Annandale-on-Hudson, NY
Abstract: 
The recent revival of Hyman P. Minsky's ideas among policymakers, economists, bankers, financial institutions, and the mass media, synchronized with the increasing gravity of the subprime financial crisis, demands a reappraisal of the meaning and scope of the 'financial instability hypothesis' (FIH). We argue that we need a broader approach than that conventionally pursued, in order to understand not only financial crises but also the periods of financial calm between them and the transition from stability to instability. In this paper we aim to contribute to this challenging task by restating the strictly financial part of the FIH on the basis of a generalization of Minsky's taxonomy of economic units. In light of this restatement, we discuss a few methodological issues that have to be clarified in order to develop the FIH in the most promising direction.
Subjects: 
financial instability
financial fragility
financial fluctuations
subprime crisis
Minsky moments
Minsky meltdown
speculative units
hedge units
Ponzi units
business cycles
JEL: 
B50
E
E32
E44
G
Document Type: 
Working Paper

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