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dc.contributor.authorWray, L. Randallen_US
dc.description.abstractThis paper applies Hyman Minsky's approach to provide an analysis of the causes of the global financial crisis. Rather than finding the origins in recent developments, this paper links the crisis to the long-term transformation of the economy from a robust financial structure in the 1950s to the fragile one that existed at the beginning of this crisis in 2007. As Minsky said, 'Stability is destabilizing': the relative stability of the economy in the early postwar period encouraged this transformation of the economy. Today's crisis is rooted in what he called 'money manager capitalism,' the current stage of capitalism dominated by highly leveraged funds seeking maximum returns in an environment that systematically under-prices risk. With little regulation or supervision of financial institutions, money managers have concocted increasingly esoteric instruments that quickly spread around the world. Those playing along are rewarded with high returns because highly leveraged funding drives up prices for the underlying assets. Since each subsequent bust wipes out only a portion of the managed money, a new boom inevitably rises. Perhaps this will prove to be the end of this stage of capitalism-the money manager phase. Of course, it is too early even to speculate on the form capitalism will take. I will only briefly outline some policy implications.en_US
dc.publisher|aLevy Economics Institute of Bard College |cAnnandale-on-Hudson, NYen_US
dc.relation.ispartofseries|aWorking paper, Levy Economics Institute |x578en_US
dc.subject.keywordHyman Minskyen_US
dc.subject.keywordmoney manager capitalismen_US
dc.subject.keywordfinancial crisisen_US
dc.subject.keywordfinancial instability hypothesisen_US
dc.subject.keywordasset-backed securitiesen_US
dc.subject.keywordcommodities ftures marketsen_US
dc.titleMoney manager capitalism and the global financial crisisen_US
dc.typeWorking Paperen_US

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