A Political-Economic Critique of Minsky's Financial Instability Hypothesis: The case of the 1966 financial crisis

AbstractAlthough Minsky’s interpretation of Keynes’s macroeconomics and essential message clashes with authoritative alternative interpretations, it has become increasingly influential during the years following the Global Financial Crisis, even in mainstream circles. This paper offers a critical evaluation of Minsky’s Financial Instability Hypothesis from the perspective of the alternative Austro-Wicksellian paradigm. Although some of the similarities and/or analogies between Minsky’s approach and that of the Austrian School suggest a more than merely superficial affinity between the two theoretical frameworks and although some scope for cross-fertilization between both approaches can be found, both theoretically and empirically, at a fundamental conceptual level both theories remain incompatible and difficult if not impossible to reconcile, in particular in terms of fundamental causality and in terms of policy conclusions and prescriptions. Despite the fact that Minsky’s policy conclusions are multifaceted and somewhat eclectic, they manifest a lack of familiarity with the conclusions of the Austrian analysis of the problems of central planning by Big Players such as Big Bank and Big Government. Both approaches also offer contrasting interpretations of the historical experience of the Global Financial Crisis.

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Keeping on employment through workers’ self- management: The case of the Argentinian empresas recuperadas

Sociologija ◽

10.2298/soc1403239c ◽

2014 ◽

Vol 56 (3) ◽

pp. 239-264

Author(s):

Slobodan Cvejic ◽

Irena Petrovic

Keyword(s):

Financial Crisis ◽

Gross National Product ◽

Historical Analysis ◽

Legal Framework ◽

Self Management ◽

The Past ◽

Trade Unionism ◽

Self Organized ◽

Survey Results ◽

Political Economic

The phenomenon of ERTs in Argentina (Empresas recuperadas por sus trabajadores) gains popularity from the financial crisis years of 1999-2002. The resulting drastic fall in gross national product, high rates of inflation, increased levels of unemployment, poverty etc., reflected the severe weaknesses and limitations of the neoliberal institutions in Argentina. This phenomenon was also determined by specific historical patterns, such as the state interventionism, a long tradition of trade unionism and workers? struggles as well as a long and extensive tradicion of cooperativism. According to the latest survey, there are more than 300 ERT in Argentina (311), employing over 13.000 workers. (Ruggeri et al 2014). The survey results show that 95% of the ERT are self-organized under the organizational and legal framework of workers? cooperatives. The main objective of this paper is to provide a political economic and social overview of the rise and establishment of ERTs in Argentina over the past two decades. Moreover, the legal and institutional preconditions that significantly encourage, limit, and condition the scope of workers? cooperatives, will be analyzed. In this analysis we will rely on the results of research on ERT that have been done in last 10 years, as well as on historical analysis of legal and institutional framework.

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Financial Sector Liberalization and Financial Instability: Case of Selected Southern African Development Community Member Countries

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v10i6(j).2593 ◽

2018 ◽

Vol 10 (6(J)) ◽

pp. 42-49

Author(s):

Nolungelo Cele ◽

Kapingura FM

Keyword(s):

Financial Crisis ◽

Financial Stability ◽

Financial Liberalization ◽

Financial Sector ◽

Financial Instability ◽

Domestic Economy ◽

Financial Reforms ◽

Empirical Results ◽

The Face ◽

Almost All

The importance of financial liberalization is well documented in the literature. However, there has been an emergency of studies, which indicate that this can be another channel through which financial instability is generated in the domestic economy. Utilising data from four SADC countries, the empirical findings show that financial reforms are positively related to financial instability in almost all the specifications. The empirical results further revealed that financial instability intensifies in the face of a financial crisis. The result suggests that financial liberalization can therefore be another source of financial instability in the region. The empirical results imply that though policymakers should liberalise the financial system, policies aimed at maintaining financial stability should also be promoted.

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Linking External Sector Imbalances and Changing Financial Instability before the 2008 Financial Crisis

10.3386/w17645 ◽

2011 ◽

Author(s):

John Whalley ◽

Manmohan Agarwal ◽

Jing Wang ◽

Sean Walsh ◽

Chen Yan

Keyword(s):

Financial Crisis ◽

Financial Instability ◽

2008 Financial Crisis ◽

The 2008 Financial Crisis ◽

External Sector

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Financial instability after the global financial crisis: taxonomy and models

10.4337/9781789904529.00008 ◽

2021 ◽

pp. 1-1

Keyword(s):

Financial Crisis ◽

Global Financial Crisis ◽

Financial Instability ◽

The Global Financial Crisis

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Introduction

Mutant Neoliberalism ◽

10.5422/fordham/9780823285716.003.0001 ◽

2019 ◽

pp. 1-38

Author(s):

William Callison ◽

Zachary Manfredi

Keyword(s):

Financial Crisis ◽

Global Financial Crisis ◽

Economic Governance ◽

Political Economic ◽

As If

To many observers, the present resembles Antonio Gramsci’s depiction of crisis: a historical interregnum in which the old is dying and the new cannot be born.1 In the wake of the 2008 global financial crisis, some scholars invoked the image of “zombie neoliberalism” to explain how the reigning form of political-economic governance could persist, as if undead, through the wreckage of its own making. Despite the economic devastation, more of the same neoliberal measures were implemented: liberalization, privatization, marketization, securitization, and austerity....

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Minsky’s financial instability hypothesis, accounting information and the 2007–9 financial crisis in the UK and US

Accounting History ◽

10.1177/1032373211417991 ◽

2011 ◽

Vol 16 (4) ◽

pp. 423-437 ◽

Cited By ~ 6

Author(s):

Paul Barnes

Keyword(s):

Financial Crisis ◽

Financial Crises ◽

Accounting Information ◽

Financial Instability ◽

Change Perceptions ◽

Boom And Bust ◽

The Uk

This paper examines the financial crisis of 2007–9 in the UK and US in terms of the financial instability hypothesis (FIH), a theory of boom, bust and financial crises. It is shown that in a similar way to the crises of 1866 and 1987 (Barnes, 2007) the FIH provides an important depiction of the 2007–9 crisis and how it came about. However, it does not recognize: (1) the role of accounting information and how it may contribute to boom and bust and be used to change perceptions and mislead; and (2) the likelihood of fraud and financial swindles, all features of the 2007–9 crisis.

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Global financial crisis

ILIRIA International Review ◽

10.21113/iir.v1i1.200 ◽

2016 ◽

Vol 1 (1) ◽

pp. 67

Author(s):

MSc. Jusuf Qarkaxhija ◽

MSc. Labinot Hashani

Keyword(s):

Financial Crisis ◽

Global Financial Crisis ◽

Stock Exchange ◽

High Rate ◽

Economic Policies ◽

Industrialized Countries ◽

Recent Developments ◽

Global Aspect ◽

Countries In Transition ◽

Political Economic

The most recent developments in economy are a clear indicator of many changes, which are a result of this high rate pacing, which also demonstrates as such. Market economy processes occur as a result of intertwining of many potential technological and human factors, thereby creating a system of numerous diver-gences and turbulences. Economics, a social science, is characteri-sed with movements from a system to another system, and is har-monized with elements or components which have impacted the development and application of economic policies as a result. This example can be illustrated with the passing from a commanded system (centralized) to a self-governing (decentrali-zed) system, while the movement from a system to another is known as transi-tion. Such transition in its own nature bears a number of problems of almost any kind (political, economic, social, etc.), and is charac-terised with differences from a country to another.Financial crisis is a phenomenon consisting of a perception of economic policies and creation of an economic and financial stabi-lity in regional and global structures. From this, one may assume that each system has its own changes in its nature, and as a result of these changes, we have the crisis of such a system. Even in the economic field, if we look closely, we have such a problem, where development trends both in human and technological fields have created a large gap between older times and today, thereby crea-ting dynamics with a high intensity of action. If we dwell on the problem, and enter into the financial world, we can see that the so-called industrialized countries have made giant leaps in deve-lopment, while countries in transition have stalled in many fields, as a result of a high rate of corruption and unemployment in these countries, and obviously these indicators are directly connected, thereby stroking the financial system in these countries.Corruption is an element, which directly and indirectly influences the pro-cess of attracting foreign investment, and further influencing the growth of unemployment, and in turn expanding the financial crisis, where finances are already fragile.In the following sections, we will elaborate on the financial crisis in a global aspect, the impacts of this crisis in economic development, and the role of stock exchange in finance, thereby creating a multi-dimensional horizon of the problem.

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