Stabilizing an Unstable Economy

He also explains the relationship between Big Government and the use of Keynesian tools to stabilize fluctuations in the economy, maintenance of corporate profits, and inflation. Most importantly Minsky warns of the danger of capitalism in fields of critical importance to society such as education, transportation, and utilities. With the dawning of the Great Recession economists were faced with the necessity of acknowledging the Minsky Moment and searched for the first edition of this book.

In response, McGraw-Hill released this new edition and provided an opportunity for all of us to learn the lessons previously not learned. It is well worth your time to read this book that explains the times we live in. Jul 13, Paul Ducard rated it really liked it. A very difficult read in many spots but I think I got most of his arguments. I found it entertaining how much of what he wrote 20 years ago seems all together familiar and applicable today.

Stabilizing an Unstable Economy: A Twentieth Century Fund Report

Mar 11, Kayce Basques rated it really liked it. Lots of passive voice. Stabilizing an Unstable Economy, by Hyman Minsky, is a wonderful, but complex book on macroeconomic theory. Minsky examines the United States of the post WWII era up to the 90's and dissects the inherent instability in the system. His book is widely credited with "predicting" the crash of '08, although this is mostly through economic modeling and prediction on credit swapping and a growing "small government" movement within the US Federal Reserve.

Minsky's book was highly interesting, and very Stabilizing an Unstable Economy, by Hyman Minsky, is a wonderful, but complex book on macroeconomic theory. Minsky's book was highly interesting, and very complicated.

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It focuses much more on Macro-Financing at the National level, as opposed to actual macroeconomic stabilization theory. Although complicated, this is a great read for those interested in US macro-financial theory and a history of US federal financing. Minsky was an advocate for Keynesian style Big Government financial controls, and disagreed with small government or market led mechanisms for overall financial control of an economy. He goes into great detail on how market led forces can cause instability, and great detail on important financial and monetary policy schemes a government could enact to encourage financial stability mechanisms are in place.

All in all, a classic economics read from a man who understood macro-financing and banking and how these factors effect overall social justice, efficiency of state and market mechanisms, and the liberty of democratic citizens. Sep 30, Diego rated it really liked it Shelves: Feb 12, Phil rated it liked it.

The Financial Instability Theory is one of the most important economic ideas of the last 50 years, but the length and dry style makes this best-suited for people truly interested in economics. Dec 12, Marta rated it it was amazing. Jan 18, Athena rated it really liked it Shelves: It is remarkable that this book, 25 years since its publication it more relevant than ever. Jan 25, Darrel Pfingston rated it really liked it. Nov 21, Barry Scatton rated it liked it. Finally got around to finishing this. I enjoyed reading Minsky's analysis even though I disagree with his ideas on monetary policy.

If financial markets are your thing it's worth reading. Dec 02, Parashar B. This book is really technical, but a very good read. It is difficult but eloquent. It is different and meaningful. It certainly deserves a detailed second reading.

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May 07, George Jankovic rated it it was amazing. One of the best economics books. It explains how bubbles form and why in economic, and not just psychological, terms. Emre rated it it was amazing Sep 01, Edwin Jain rated it really liked it Aug 14, Ann Marie rated it liked it Nov 27, Clark rated it liked it Oct 19, Andrew rated it really liked it Dec 06, Mariamawit rated it it was amazing Jun 01, Kacey rated it really liked it Apr 10, Cory Plikuhn rated it it was ok Dec 20, Pak Shing rated it really liked it Jun 08, Ben rated it really liked it Nov 08, Stephen rated it it was amazing Oct 29, His research attempted to provide an understanding and explanation of the characteristics of financial crises, which he attributed to swings in a potentially fragile financ Hyman Philip Minsky September 23, — October 24, was an American economist, a professor of economics at Washington University in St.

His research attempted to provide an understanding and explanation of the characteristics of financial crises, which he attributed to swings in a potentially fragile financial system. Minsky is sometimes described as a post-Keynesian economist because, in the Keynesian tradition, he supported some government intervention in financial markets, opposed some of the financial deregulation policies popular in the s, stressed the importance of the Federal Reserve as a lender of last resort and argued against the over-accumulation of private debt in the financial markets. Minsky's economic theories were largely ignored for decades, until the subprime mortgage crisis of caused a renewed interest in them.

Books by Hyman P. Chapter 11 in about inflation. It is compatible with the multiplier analysis in orthodox Keynesian theory" "The determination of employment, wages, and prices starts with the profit calculations of businessmen and bankers. This proposition is in sharp contrast to the views of neoclassical monetarist theory. Minsky develops his inflation theory by discussing money wages, price-deflated wages, government as an inflation engine, and trade union roles in inflation.

Part 5 is the culmination of his work where he discusses possible policy implications of his theory through the lens of his financial instability hypothesis. An overarching agenda and approach should be developed to do this. An employment strategy should be developed, financial reform should be carefully crafted so as to not make matter worse. As I mentioned at the beginning, I am not an economist. Minsky's description of the economy as developed through his instability model appears to describe much of how the interactions work, the inherent instability of a capitalist system, and his proposals to manage the instability appear to have merit for consideration.

Especially in light of the recession. Minsky appears to be an interesting combination of Keynesians who look to mitigate busts, and Austrians who look to prevent artificial booms. For an easy read which builds a hypothetical economy, using an example of an island and fish on up, to describe economic history through the lens of the Austrian economic model: For more on Keynes, this work by Hunter Lewis describes what Keynes said and what he didn't say side by side.

Where Keynes Went Wrong: This is and has really re-emerged as a classic and prophetic book on the endogenous factors that drive instability. Again, the book is referred to a little too late and undoubtedly the same will happen in whatever next bubble next pops. To give a quick overview, most people study economic growth as as function of the economy's factors of production including human capital and their dynamics modern economists are updating methods and ideas but people are still taught the solow growth model as foundational.

Minsky explores a form of instability that is not discussed in most growth models, he discusses the instability that is embedded in our economies resulting from the use of currency its fluctuation from being scarce to abundant. To me his insights as to the dynamics of what drives asset bubbles, in particular, banks propensity to lend as well as agents propensity to borrow against assets as a function of recent history was so spot on it makes you smile were it not so sad that it just happened. Minsky has identified a particularly dangerous form of the animal spirits that Keynes and more recently Schiller have written about, especially in a fiat currency environment in which we are separated from the pricing of money mechanism that the central bank is empowered to control.

This book is worth reading for a multitude of reasons. Not only does it make one think about the worlds inherent instability, for which no obvious solution exists, it reminds us that we need to work on policy that tries to generate negative feedback to counteract the positive feedback to take us from hedge finance, to speculative finance, to ponzi finance.

After reading this book, one is not an expert able to give a solution to endogenous money and asset price shock risks, but one can understand the problem much more deeply. Given the dynamics driving the instability isnt stationary and central bank measures often take a long time to filter through obviousy example being raising rates yet continuation of property speculation more time needs to be spent on what policy might induce counterbalancing feedback.

After reading Minsky one can read policy recommendations and get a more complete sense of the influence and the merit in things like bank capital cushions being used to dampen multiyear volatility. This has always been a must read, but the recent and ongoing crisis is another re-affirmation to add this to ones cart.

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On pages Minsky classifies debt according to risk and posits that as the economic cycle peaks banks accept increasingly riskier debt creating instability. One person found this helpful.

Capitalist market mechanism cannot lead to a sustained, stable-price, full-employment equilibrium. Serious business cycles are due to financial attributes that are essential to capitalism" Minsky includes a good overview of the neoclassical synthesis and how the Walrasian 'village fair' economy is incompatible with Keynes' General Theory. He also sharply criticizes Hicks and Patinkin for 'bastardizing' Keynes.

Minsky's assertions sound so convincing I'm struck wondering why he was ignored. Whether it was from some serious flaw in his theory that I'm ignorant of or if it was merely political Minsky is not afraid to point the blame at Monetarists and Reagan.

Stabilizing an Unstable Economy | Levy Economics Institute

However, Minsky's solutions in section 5 would be considered highly controversial today. Let alone the socialization of key capital intensive industries. Minsky often throws in long chains of causality that a layperson probably would not truely grasp. This is by no means a passive book.

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Stabilizing an Unstable Economy [Hyman P. Minsky] on *FREE* shipping on qualifying offers. “Mr. Minsky long argued markets were crisis prone. Stabilizing an Unstable Economy. The late American economist and Distinguished Scholar Hyman P. Minsky first wrote about the inherent instability of financial.

Hopefully the next generation of economists may learn from the current crisis, with the help of men like Minsky, and successfully stabilize an unstable economy. Kindle Edition Verified Purchase. Great and informative perspective of economics from a great mind. See all 29 reviews.

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