Hyman Minsky

By Michael Pettis Last week Derek Scissors, a think tank analysts at the American Enterprise Institute, published an article in which he referred to an October, 2014, studyby Credit Suisse that attempts to measure total household wealth by…

Michael Pettis has a good piece on debt and credit that I ran on the blog this morning. His thoughts on loss socialization are important not just in the context of China but also of other markets like Europe, the US, Canada and Australia…

Burgeoning debt in China was not an unlucky accident. It is fundamental to the way the growth model works. We coming closer to the 'Minsky Moment', in which the system requires an acceleration in credit growth simply to maintain existing…

From Minsky’s earliest work, he adopted what became known as the “endogenous money” approach that was revived by Post Keynesians in the 1980s. It is useful to return to Krugman’s critique of Minsky to compare Minsky’s early view of banking…

We need to abandon the Loanable Funds model of lending, which treats banks as “mere intermediaries” and therefore ignores them in macroeconomics. the Neoclassical belief in Loanable Funds is the biggest barrier there is to the development…

I don’t want to be too glib here. I recognize that policymakers are in an extremely difficult position and that there is no longer any easy solution, but railing at the markets rather than trying to understand why they are doing what they…

I have a ton of links so I am going to break them up into groups. Here's the first bunch from late last week. Three topics are most interesting.

Charles Kindleberger’s classic book on the Great Depression was originally published 40 years ago. In the preface to a new edition, two leading economists argue that the lessons are as relevant as ever.

Our brains are not calibrated to deal with the unexpected. Most of us believe we are good risk managers but in reality we are not. Most of us trust that risk can always be quantified and expressed through some fancy modelling whereas,…

In his publications in the 1950s through the mid 1960s, Minsky gradually developed his analysis of the cycles. First, he argued that institutions, and in particular financial institutions, matter. This was a reaction against the growing…