The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Minsky, Hyman (1919–1996)

  • Perry Mehrling
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_3011

Abstract

Hyman Philip Minsky (b. 23 September 1919, d. 24 October 1996) was best known for his Financial Instability Hypothesis of the business cycle, which emphasised the dynamics of business investment finance as a recurring cause of macroeconomic instability (Minsky, Financial instability revisited: the economics of disaster. In: Reappraisal of the federal reserve discount mechanism. Board of Governors, Federal Reserve System. Reprinted as Chapter 6 in Minsky (1982), 1972; Finance and profits: the changing nature of American business cycles. In: The business cycle and public policy 1929–1980: a compendium of papers submitted to the Joint Economic Committee. Congress of the United States, 96th Congress, 2nd Session. Government Printing Office, Washington, DC. Reprinted as Chapter 2 in Minsky (1982), 1980a). During a boom, the expansion of debt-financed investment spending causes initial ‘robust’ financial structures to evolve into ‘fragile’ financial structures, and it is this evolution that ultimately brings the expansion to an end. In the subsequent contraction, typically some fragile financial structures collapse while others are refinanced into more robust financial structures, thereby creating the preconditions for renewed expansion.

Keywords

Analytic institutionalist Financial Instability Hypothesis Financial innovation Financial Keynesian Lender of last resort 

JEL Classifications

B31 B52 E44 N22 O16 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Perry Mehrling
    • 1
  1. 1.