An Insider’s View on the Economics of Hyman Minsky
Chapter 11: Drivers, adapters and constraints
This chapter starts extending Minsky’s analysis by entering his black box of tools. In particular, it analyzes the role that autonomous demand (the driver) may have in stimulating growth when supply (the adapter) is endogenized. In order to study the interaction between these forces, the existence of spare resources and unemployment is assumed. This presence justifies the assumption of given prices and wages and allows the reconciliation process between the so-called Harrodian warranted rate of growth and the natural rate of growth. Furthermore, the presence of autonomous demand and an endogenous natural rate of growth can check, under certain circumstances, the instability of the system without referring to the presence of an exogenous ceiling.
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