Minsky’s Moment
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Minsky’s Moment

An Insider’s View on the Economics of Hyman Minsky

Piero Ferri

At its core this book sets out the analytical and methodological foundations of Minsky’s financial instability hypothesis (FIH). Grounded on the joint work of Piero Ferri and Hyman Minsky, it offers insightful analysis from a unique insider's perspective. The objective is to deepen and enlarge the toolbox used by Minsky and to place the analysis within a dynamic perspective where a meta model, based upon regime switching, can encompass the different forms that the FIH can assume.
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Chapter 3: A synoptic view of the financial instability hypothesis

Piero Ferri

Abstract

This chapter analyzes the analytical consequences of the fact that the question mark present in one of Minsky’s most famous books, Can “It” Happen Again?, which was published in 1982, can be dropped. The fact that the Great Recession did happen has had a great impact on the post-Keynesian world and has challenged the mainstream view which refers to “rare events”, “black swans” and other odd statistical distributions. The crisis was endogenous, it linked monetary to real aspects and it manifested itself in a dynamic setting. Furthermore, it could be countered by thwarting forces that grapple with the endogenous destabilizing market processes.

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