Minsky Moments, Russell Chickens, And Gray Swans: The Methodological Puzzles Of The Financial Instability Analysis

Date Added: Nov 2009
Format: PDF

The recent revival of Hyman P. Minsky's ideas among policymakers, economists, bankers, financial institutions, and the mass media, synchronized with the increasing gravity of the subprime financial crisis, demands a reappraisal of the meaning and scope of the "Financial Instability Hypothesis" (FIH). The authors argue that they need a broader approach than that conventionally pursued, in order to understand not only financial crises but also the periods of financial calm between them and the transition from stability to instability.