Theories of Financial Disturbance

Theories of Financial Disturbance

An Examination of Critical Theories of Finance from Adam Smith to the Present Day

Jan Toporowski

Theories of Financial Disturbance examines how the operations of market-driven finance may initiate and transmit disturbances to the economy at large, by looking in detail at how various economists envisaged such disturbances occurring.


Jan Toporowski

Subjects: economics and finance, financial economics and regulation, post-keynesian economics


INTRODUCTION 1. Keynes, Treatise on Money, Volume II (1930), pp. 360–61. 2. See Backhouse and Laidler, ‘What was Lost with IS/LM’ (2003). 3. Keynes, Review of Irving Fisher, The Purchasing Power of Money (1911). 4. Chick and Dow, ‘Formalism, Logic and Reality: A Keynesian Analysis’ (2001). See also Toporowski, ‘Mathematics as natural law’ (2002b). 5. Tobin, ‘A General Equilibrium Approach to Monetary Theory’ (1969). 6. de Brunhoff, Marx on Money (1976), pp. 100–101. 7. Schumpeter, The Theory of Economic Development (1934), chapters III and VI. 8. Ibid., p. 221. 9. Ibid., pp. 220–22. 10. See Schumpeter’s 1927 paper, ‘The Explanation of the Business Cycle’ and his major 1939 study Business Cycles. 11. Robinson, The Rate of Interest and Other Essays (1952), p. 159. 12. Patinkin, Anticipations of the General Theory? (1982), chapter 1; Merton, ‘Singletons and Multiples in Scientific Discovery’ (1961). 13. Minsky, John Maynard Keynes (1975), p. vi. 14. Kindleberger, Manias, Panics and Crashes (1989), p. 12. 15. Kindleberger’s remark on the ancestry of Minsky’s financial instability hypothesis elicited a vague comment from Minsky that ‘Karl Marx and John Maynard Keynes belong to the list of great economists who held that the capitalist economy is endogenously unstable’ (Minsky, ‘The Financial Instability Hypothesis: Capitalist Processes and the Bahavior of the Economy’ (1982b, p. 37, note 1). In a personal communication, Professor Julio LopezGallardo told this author that in conversation Minsky expressed his high regard for the work of Veblen. 16. Wicksell, Lectures on Political Economy Volume II...

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