The Economic Legacy of Hyman Minsky, Volume I
Edited by Riccardo Bellofiore and Piero Ferri
Chapter 5: Hyman Minsky: what kind of (post-) Keynesian?
Anna Maria Variato* INTRODUCTION Within the ﬁrst minutes of any conversation with Hyman Minsky one learns that economic theory is hopelessly sterile unless it recognizes the fundamental impact of ﬁnance … Another strong impression that one gets … is that theoretical economics and economic policy analysis are inextricably linked. (Fazzari, 1992, pp. 3–4) The sense one gets from conversation with Hyman Minsky is that modern capitalism, in what he calls ‘ﬁnancially sophisticated economies’, is a complex and dynamic system. Its essential features cannot be captured in a static framework … The endogenous dynamics of the system have the potential to break out into instability. Wise policy intervention is essential to containing instability. Such intervention may lead to acceptable behavior for a time, but the risk remains that the system will overcome any particular structure of institutional containment mechanisms. (Ibid.) When we encounter an economist of great personality and talent, who masters the pieces of economic puzzles at will, we feel both fascinated and embarrassed. On the one hand, we experience a deep intellectual emotion; on the other, we ﬁnd ourselves short of words to describe such an experience. For the great virtue of true masters is to leave behind them an inspiration, that is at once an object of respect and a challenge. Hyman Minsky was one such economist. His impressive body of work reveals an eclectic nature, capable of appropriating instruments from such different ﬁelds as mathematics, economic theory and ﬁnance, and empirical analysis, and applying them to understanding the complex...
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