Date Added: Oct 2009
This paper aims to help bridge the gap between theory and fact regarding the so-called "Minsky moments" by revisiting the "Financial Instability Hypothesis" (FIH). The authors limit the analysis to the core of FIH - that is, to its strictly financial part. Their contribution builds on a reexamination of Minsky's contributions in light of the subprime financial crisis. They start from a constructive criticism of the well-known Minskyan taxonomy of financial units (hedge, speculative, and Ponzi) and suggest a different approach that allows a continuous measure of the unit's financial conditions.