The Transition to a Market Economy: Financial Options

Minsky,; Hyman, P

doi:10.2139/ssrn.179455

Cited by 3 publications

(5 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Minsky emphasized, however, that "the seeds of future failures are 24 Minsky (1992) 25 Minsky (1992), op.cit. 26 Minsky (1991) ripening as structural relations, conventions, and institutions change. There is no automatic pilot for the economy. "…”

Section: Super-cyclesmentioning

confidence: 99%

Why Do Banking Crises Occur? The American Subprime Crisis Compared with the Norwegian Banking Crisis 1987-92

Knutsen

2012

SSRN Journal

View full text Add to dashboard Cite

This paper analyses the causes of banking crises by the way of a historical comparative casestudy. Moreover, the analysis draws on theories elaborated by the economist Hyman Minsky.The evidence presented suggests that the fundamental causes of the compared crises are found in the macroeconomic boom-bust fluctuation and the building up of asset market bubble(s) preceding the breakdown and the crisis. We also find boom-bust cycles as depicted in a basic Minsky-cycle, where financial instability and the outbreak of crisis is a consequence of an unbalanced mix of hedge, speculative and Ponzi financial positions. In both cases we have observed a pattern where stabilizing or thwarting institutions, as Minsky denoted them, were eroded over time. Each case demonstrates that structural economic shifts were interacting with major institutional changes and created processes that effectively removed institutional stabilizers. Hence, systemic risk was allowed to fill up the financial system. These processes were essential for building up financial imbalances of such a magnitude that the particular booms ended in systemic banking crises.

show abstract

Section: Super-cyclesmentioning

confidence: 99%

Why Do Banking Crises Occur? The American Subprime Crisis Compared with the Norwegian Banking Crisis 1987-92

Knutsen

2012

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…The latter is not secondarily due to the increase in current account imbalances, more notably since the late 1990s, which shows the failure to deal with global imbalances at the national level. 35 The explosion of Schinasi's inverted pyramid of finance in the last fifty years is predominantly the result of the explosion of leveraging debt and liquidity-to a large extent due to contracts internal to the financial system-in what Fisher calls the "pyramiding of debt" and Minsky calls "financial layering" (Minsky 1986): on a small amount of primary and secondary liquidity, a large pyramid of leveraged market and over-thecounter positions is built, whose liquidity depends on the validation of expected asset prices. We have seen that Marshall, Hawtrey, and Fisher had already exposed the instability of such construction.…”

Section: The Post-bretton Woods' Age Of Financial Instabilitymentioning

confidence: 99%

“…The overvaluation of the expected margin of safety during a protracted expansion helps explain Minsky's dictum that stability is destabilizing (Minsky 1992, 7). 38 See Minsky (1986 and1991). The US evolution toward money manager capitalism and its consequences are discussed by Kregel (2010a) and Wray (2011).…”

Section: The Post-bretton Woods' Age Of Financial Instabilitymentioning

confidence: 99%

Ages of financial instability

Tonveronachi¹

2020

Journal of Post Keynesian Economics

View full text Add to dashboard Cite

Starting from the mid-nineteenth century, this paper analyzes two periods of financial instability connected with financial globalization. The first culminates with the 1929 crisis, while the second characterizes the more recent experience starting from the 1970s. The period in between is divided into two subperiods. The first goes up to World War II and sees a retrenchment from globalization and the affirmation of a statist approach to national policy autonomy in pursuing domestic goals, for which we take as examples the New Deal, financial regulation, and the new international cooperative approach finally leading to Bretton Woods. The second subperiod, marked by the new international monetary order and limited globalization, although appearing as a relatively calm interlude, conceals the seeds of a renewed push toward financial fragility. The above periods are synthetically analyzed in terms of the development and mutual fertilization of theories, institutions, and vested public and private interests. The narrative is based on two interpretative keys: the Minskyan theory of financial fragility and changes in the public-private partnership, mainly with reference to the financial sector for which the role of the State as guarantor of last resort necessarily ensues. The lesson that can be derived is that a laissez-faire approach to globalization strengthens asymmetric powers and necessarily leads to overglobalization, as well as to financial and economic instability, rendering it extremely difficult and socially costly for the State to comply with its role of financial guarantor.

show abstract

“…. ] as Heinz has pickles" (Minsky 1991b). Through a series of articles, Minsky considered that "[t]he task confronting economics today may be characterized as a need to integrate Schumpeter's vision of a resilient intertemporal capitalist process with Keynes's hard insights into the fragility introduced into the capitalist accumulation process by some inescapable properties of capitalist financial structures" (Minsky 1986b: 121).…”

Section: Minsky's Stages Of Capitalismmentioning

confidence: 99%

“…In addition, a twofold hypothesis for the transformation of institutional structures is visible in the regulation school's work: the hypothesis of complementary and hierarchical institutional forms (Boyer 2011;Amable 2003). In so doing, it goes against the path that assumes a strict coupling, explaining an abrupt break in the growth regime once the previous complementarity is broken (the case of the transition of Soviet economies that Minsky studied (Minsky 1991b) could be classified in this configuration, wherein the fall of the Berlin Wall and opening up of borders were sufficient to trigger a collapse of the corresponding regimes). Instead, this analysis favors a gradual re-echeloning of institutional arrangements, leading to a transition to a new form of capitalism.…”

Section: Frt and Minsky: Identifying A Complementary Fitmentioning

confidence: 99%

Minsky’s Analysis of Capitalist Development

Diop

2015

Review of Radical Political Economics

View full text Add to dashboard Cite

Beginning in the mid-’80s, well after he brought his famous financial instability hypothesis to maturity, Hyman P. Minsky analyzed the evolution of capitalism. This paper proposes a critical reading of this analysis, focusing on the institutional dimension of Minsky’s research. From my point of view, if Minsky’s analysis constitutes more a history of capitalism than a theory of capitalism, this is because of the weak conceptualization of institutions and the absence of a genuine analysis of institutional change. From this perspective, I believe it necessary to clarify and complete Minsky’s institutional analysis. Only by doing so can we take full measure of Minsky’s research on the evolution of capitalism and identify all the repercussions for an analysis of the instability and resilience of the current stage of capitalism.

show abstract

The Transition to a Market Economy: Financial Options

Cited by 3 publications

References 0 publications

Why Do Banking Crises Occur? The American Subprime Crisis Compared with the Norwegian Banking Crisis 1987-92

Why Do Banking Crises Occur? The American Subprime Crisis Compared with the Norwegian Banking Crisis 1987-92

Ages of financial instability

Minsky’s Analysis of Capitalist Development

Contact Info

Product

Resources

About