Economist Hyman Minsky – Economic Crises Inevitable

September 14th, 2009 by andum | Posted in Economy, Wealth Preservation

photo credit: MjaMes1408

Interesting overview of Hyman Minsky in the Boston Globe (see article here), a 20th century Harvard trained economist who was not considered to have had a major influence on macroeconomic thought during his lifetime or after his death – until now.  Apparently, his ideas are now in vogue.  The article highlights his “Financial Instability Hypothesis” – namely, that economic crises arise after periods of economic stability, not instability, when lenders and borrowers take on more risk in order to make more money.   His proposed solutions to a depression like crisis included having the Federal Reserve serve as a lender to firms in trouble (being done) and having the government employ those out of work (not likely). (credit to Barry Ritholtz of the Big Picture blog)

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