The Economic Legacy of Hyman Minsky, Volume I
Edited by Riccardo Bellofiore and Piero Ferri
Chapter 11: Yes, ‘it’ did happen again – the Minsky crisis in Asia
11. Yes, ‘it’ did happen again – the Minsky crisis in Asia J.A. Kregel INTRODUCTION – THE ST LOUIS CARDINALS AND THE ASIAN CRISIS The Asian ﬁnancial crisis is unfortunate, ﬁrst of all because it has set income and wealth levels in these countries back some ten years. But it is also unfortunate because Hy Minsky is no longer here to explain it to us, or even perhaps to have prevented it. Now, those of you who knew Hy will instantly remark that Hy knew virtually nothing about Asia. But that has not stopped hundreds of our colleagues from explaining what went wrong in Asia. And, as those of you who knew Hy will recognize, in his case, it really would not have made much difference. Hy only ever really claimed to be an expert in one thing – the St Louis Cardinals. The rest was just an interesting intellectual speculation. But I think we can venture a good guess at what he would have made of the crisis, for it was made to order for the Minsky instability hypothesis. As you may remember, Hy spent a good deal of time explaining why ‘It’, that is, the Great Depression, had been a one-night stand. He told us that ‘it’ can’t happen again. But, in the case of Asia, ‘it’ did. And this is also a lesson for why ‘it’ might happen again outside the Far East. First, Hy insisted on the beneﬁcial impact of Big Government in providing a ﬂoor under aggregate...
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