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Description of Stabilizing an Unstable Economy

"Mr. Minsky long argued markets were crisis prone. His 'moment' has arrived." -The Wall Street Journal In his seminal work, Minsky presents his groundbreaking financial theory of investment, one that is startlingly relevant today. He explains why the American economy has experienced periods of debilitating inflation, rising unemployment, and marked slowdowns-and why the economy is now undergoing a credit crisis that he foresaw. Stabilizing an Unstable Economy covers: The natural inclination of complex, capitalist economies toward instability Booms and busts as unavoidable results of high-risk lending practices "Speculative finance" and its effect on investment and asset prices Government's role in bolstering consumption during times of high unemployment The need to increase Federal Reserve oversight of banks Henry Kaufman, president, Henry Kaufman & Company, Inc., places Minsky's prescient ideas in the context of today's financial markets and institutions in a fascinating new preface. Two of Minsky's colleagues, Dimitri B. Papadimitriou, Ph.D. and president, The Levy Economics Institute of Bard College, and L. Randall Wray, Ph.D. and a senior scholar at the Institute, also weigh in on Minsky's present relevance in today's economic scene in a new introduction.
A surge of interest in and respect for Hyman Minsky's ideas pervades Wall Street, as top economic thinkers and financial writers have started using the phrase "Minsky moment" to describe America's turbulent economy. There has never been a more appropriate time to read this classic of economic theory.

Title Information

ISBN:

9780071592994

Pages:

350 pages

Format:

Hardback

Product Code:

262027

Publisher:

McGraw-Hill

Published:

01/05/2008

Edition:

illustrated edition

Financial Guru Reviews

A classic from a very different school of economics than Taylor, Minsky's book is a treasure trove of financial history and maverick economic thinking. From his central theses, I ultimately disagree with the behaviourist one. It is sadly not spelled out as clearly as the others but basically holds that banks get too optimistic in boom periods which, as I describe in my book, isn't necessarily true. His other key insight about the role of governments and a lender of last resort, however, is spot on. Minsky sees bail-outs of banks as a legitimate choice if governments deal with the resulting inflationary pressure and the areas of risk taking that caused the crisis. Both are highly relevant today where countries compete in printing money but waste their focus for regulatory reform in dead ends (with the acquiescence of banks which much prefer regulators to stay in their ivory tower and think about "macro-prudential regulation" and "systemic interconnectedness" rather than really doing their job in being intrusive and stopping banks from doing lots of things). We have all learned to compare the current crisis with the Japanese or Swedish experience in the 1990s but Minsky's excellent empirical findings raise the question if we should not be equally concerned about the UK and US banking crises in the 1970s and early 1980s.
Niels Kroner

Reviews

• A classic from a very different school of economics than Taylor, Minsky's book is a treasure trove of financial history and maverick economic thinking. From his central theses, I ultimately disagree with the behaviourist one. It is sadly not spelled out as clearly as the others but basically holds that banks get too optimistic in boom periods which, as I describe in my book, isn't necessarily true. His other key insight about the role of governments and a lender of last resort, however, is spot on. Minsky sees bail-outs of banks as a legitimate choice if governments deal with the resulting inflationary pressure and the areas of risk taking that caused the crisis. Both are highly relevant today where countries compete in printing money but waste their focus for regulatory reform in dead ends (with the acquiescence of banks which much prefer regulators to stay in their ivory tower and think about "macro-prudential regulation" and "systemic interconnectedness" rather than really doing their job in being intrusive and stopping banks from doing lots of things). We have all learned to compare the current crisis with the Japanese or Swedish experience in the 1990s but Minsky's excellent empirical findings raise the question if we should not be equally concerned about the UK and US banking crises in the 1970s and early 1980s.
  J Hagen

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About Hyman P. Minsky

Hyman P. Minsky, Ph.D., was an American economist who studied under Joseph Schumpeter and Wassily Leontief. He taught economics at Washington University, University of California--Berkeley, Brown University, and Harvard University. Minsky joined the Jerome Levy Economics Institute of Bard College as a distinguished scholar in 1990, where he continued his research and writing until a few months before his death in October, 1996. His two seminal books were Stabilizing an Unstable Economy and John Maynard Keynes.