This book provides a timely and engaging treatment of Hyman Minsky's approach to economics, which is enjoying a renewed appreciation because of its prescient analysis of the slow but sure transformation of the capitalist economy in the post-war period. Many have called the global financial crisis that began in the United States in 2007 a `Minsky crisis', and these original contributions demonstrate precisely why both academic economists as well as policymakers have turned to Minsky for guidance. The book brings together the foremost Minsky scholars to provide a comprehensive overview of his approach, with extensions to bring the analysis up to date.
With the 2008 republication of his seminal books John Maynard Keynes (1975) and Stabilizing an Unstable Economy (1986), Minsky's ideas saw an unprecedented resurgence. This Companion exemplifies this resurgence by emphasizing that economists have discovered Minsky's Financial Instability Hypothesis and have widely applied it to the course of events in the US from 2004 until the real estate market went bust. The book also argues that many commentators have recently begun to employ Minsky's hedge, speculative and Ponzi classification scheme to analyze the evolution of mortgage markets. Many of Minsky's favorite themes - `stability is destabilizing', the role of the `Big Government' and `Big Bank' in constraining endogenous instability, banker's rationality, money non-neutrality, creative destruction and innovation by financial institutions - are taken up in the chapters commissioned especially for this volume. Using the introductory chapter as a springboard, the work here delves deeply into Minsky's ideas and how they have impacted thought today.
The scope and comprehensive analyses found in this Companion will appeal particularly to economists and post-Keynesian economists, institutionalists and upper-level scholars of economics and finance.
Edited by Dimitri B. Papadimitriou, President, The Levy Economics Institute of Bard College and Professor of Economics, Bard College, US and L. Randall Wray, Professor of Economics, University of Missouri-Kansas City, US; Senior Scholar, Levy Economics Institute, US and Research Director, Centre for Full Employment and Price Stability, US
Contents: 1. Introduction: Minsky on Money, Banking and Finance Dimitri B. Papadimitriou and L. Randall Wray 2. What Would Minsky Have Thought of the Mortgage Crisis? Jan Kregel 3. Minsky and Economic Policy: `Keynesianism' All Over Again? Eric Tymoigne 4. Minsky in the `New' Capitalism: The New Clothes of the Financial Instability Hypothesis Riccardo Bellofiore, Joseph Halevi and Marco Passarella 5. Rational and Innovative Behaviors at the Core of Financial Crises: Banking in Minsky's Theory Eric Nasica 6. What Would Minsky Do? Marshall Auerback, Paul McCulley and Robert W. Parenteau 7. It's the Right Moment to Embrace the Minsky Model Robert J. Barbera and Charles L. Weise 8. Innovation and Equilibrium? Martin Shubik 9. Hyman Minsky and the Dilemmas of Contemporary Economic Method Duncan K. Foley 10. Financial Instability and Agents' Heterogenity: A Post Minskyan Research Agenda Tiziana Assenza, Domenico Delli Gatti and Mauro Gallegati 11. Growth Cycles and the Financial Instability Hypothesis (FIH) Piero Ferri 12. A Spatialized Approach to Asset Bubbles and Minsky Crises Gary A. Dymski 13. The Psychology of Financial Markets: Keynes, Minsky and Emotional Finance Sheila Dow 14. The Generalized `Minsky Moment' James K. Galbraith and Daniel Munevar Sastre Index