My /Cullen Roche/ View On Minsky’s Financial Instability Hypothesis
In short, Minsky’s FIH was ignored for far too long.
At the same time, it has the potential to mislead people into thinking that booms are necessarily going to lead to busts and that private debt financed booms will tend to become speculative and ponzi booms.
Additionally, the mainstream models that ignored debt and assumed that ponzi booms were unpredictable, is probably extreme.
Cullen Roche PRAGMATIC CAPITALISM 11 April 2019
“well-intentioned government policies aimed at reducing the systemic risks of a crisis in the global financial system may have the unintended and perverse consequence of actually increasing the risk of such a crisis.”
Or Hyman Minsky’s analysis of why stability is destabilizing.
At the same time, it has the potential to mislead people into thinking that booms are necessarily going to lead to busts and that private debt financed booms will tend to become speculative and ponzi booms.
Additionally, the mainstream models that ignored debt and assumed that ponzi booms were unpredictable, is probably extreme.
Cullen Roche PRAGMATIC CAPITALISM 11 April 2019
“well-intentioned government policies aimed at reducing the systemic risks of a crisis in the global financial system may have the unintended and perverse consequence of actually increasing the risk of such a crisis.”
Or Hyman Minsky’s analysis of why stability is destabilizing.
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