Skepticism About Minsky’s Financial Instability Hypothesis: A Comment on Flanders
Read this article
- Access statistics
- 6,015 article downloads
- 4,971 complete issue downloads
- Total: 10,986
June Flanders (2015) provides a useful introduction to Hyman Minsky’s views on banking and macroeconomics. Minsky’s “financial instability hypothesis” (FIH) basically says that debt-based intermediation does not enable intertemporal equilibrium but rather self-generates boom and bust even in the absence of government intervention. The theory and history of banking cast doubt on the FIH.