Scholarly Comments on Academic Economics

Skepticism About Minsky’s Financial Instability Hypothesis: A Comment on Flanders

by

Read this article

Access statistics
7,071 article downloads
5,466 complete issue downloads
Total: 12,537

Abstract

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.