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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 11: Drivers, adapters and constraints

Piero Ferri


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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