On Democratizing Financial Turmoil: A Minskian Analysis Of The Subprime Crisis
Source: Levy Economics Institute
The paper uses Minsky's financial instability hypothesis as an analytical framework for understanding the subprime mortgage crisis and for introducing adequate reforms to restore economic stability. The authors argue that the subprime crisis has structural origins that extend far beyond the housing and financial markets. They further argue that rising inequality since the 1980s formed the breeding ground for the current financial markets meltdown. What they observe today is only the manifestation of the ingenuity of the market in taking advantage of moneymaking opportunities, regardless of the consequences.