The limits of Minsky's financial instability hypothesis as an explanation of the crisis

Monthly Review

Volumn 61, Issue 11, 2010, Pages 28-43

  Palley, Thomas I ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 77952016034     PISSN: 00270520     EISSN: None     Source Type: Journal    
DOI: 10.14452/MR-061-11-2010-04_2     Document Type: Review

References (43)

1. Ferri, Piero and Hyman P. Minsky, "Market Processes and Thwarting Systems," Strucural Change and Economic Dynamics 3 (1992), 79-91;
2. Hyman P. Minsky, "The Financial Instability Hypothesis," Working Paper no. 74, Levy Economics Institute of Bard College, http://levy.org.
3. Justin Lahart, "In Time of Tumult, Obscure Economist Gains Currency," Wall Street Journal, August 18, 2008;
4. Charles W. Calomiris, "Not (Yet) a Minsky Moment" VoxEU, November 23, 2007, http://voxeu.org;
5. Martin Wolf, The End of Lightly Regulated Finance Has Come Closer,' FT.com, September 16, 2008;
6. Paul Krugman, "The Night They Read Minsky," http://krugman.blogs.nytimes. com, May 17, 2009.
7. Jan Kregal, "The Natural Instability of Financial Markets," Levy Economics Institute of Bard College, Working Paper no. 523 (December 2007), http//Mevy org,
8. "Minsk's Cushions of Safety," Levy Economics Institute, Public Policy Brief no. 93 (January 2008), http://levy.org,
9. and "Changes in the U.S. Financial System and the Subprime Crisis," Levy Economics Institute, Working Paper no. 530 (April 2008), http://levy.org;
10. Charles Whalen, "The US Credit Crunch of 2007," Levy Economics Institute, Public Policy Brief no. 92 (2007), http://levy. org;
11. L Randall Wray, "Lessons from the Subprime Meltdown," Levy Economics Institute, Working Paper 522 (December 2007), http://levy.org,
12. "Financial Markets Meltdown," Levy Economics Institute, Public Policy Brief no. 94 (2008), http://levy.org,
13. and "Money Manager Capitalism and the Global Financial Crisis," Levy Economics Institute, Working Paper no. 578 (September 2009), http:// levy.org.
14. John Bellamy Foster and Robert W. McChesney, "Monopoly-Finance Capital and the Paradox of Accumulation," Monthly Review 61, no.5 (October 2009), 1-20;
15. David M. Kotz, The Financial and Economic Crisis of 2008," Review of Radical Political Economics 41, no. 3 (2009), 305-17;
16. Thomas I. Palley, 'America's Exhausted Growth Paradigm," Chronicle of Higher Education, April 11, 2008;
17. and "America's Exhausted Paradigm: Macroeconomic Causes of the Financial Crisis and the Great Recession," New America Foundation (July 22, 2009), http://newamerica.net
18. The treaty of Detroit refers to the fiveyear wage contract negotiated by the United Autoworkers Union with Detroit's big-three automakers in 1950. That contract symbolized a new era of wage-setting in the U.S. economy led by unions, in which wages were effectively tied to productivity growth.
19. Thomas I. Palley, 'Financialization: What It Is and Why It Matters," in Eckhard Hein, et al., eds., Finance-Led Capitalism? (Marburg, Germany: Metropolis-Verlag, 2008), 29-60.
20. "Summers: Obama Policies Averted Economic Abyss," New York Times, October 12, 2009.
21. Ben Benanke, "The Great Moderation," Remarks at the Meetings of the Eastern Economic Association, Washington, D.C., February 20, 2004, http://federalreserve.gov.
22. Ferri and Minsky, "Market Processes and Thwarting Systems."
23. See citations in endnote 3 above.
24. See citations in endnote 4 above.
25. See Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966).
26. Mishel, et al., 2008. Not Included in Original References.
27. Thomas I. Palley, "The Institutionalization of Deflationary Policy Bias," in H. Hagerman and A. Cohen, eds., Advances in Monetary Theory (Boston: Kluwer Academic Publishers, 1997), 157-173
28. Samuel Bowles, David M. Gordon, and Thomas E. Weisskopf, Beyond the Wasteland (Garden City, New Jersey: Anchor Press/Doubleday, 1983);
29. David M. Gordon, Fat and Mean (New York: Free Press, 1996).
30. Palley, "America."
31. Many leading mainstream economists are now predicting an extended period of stagnation. Lawrence Summers declared in a speech on the "Principles of Economic Recovery and Renewal' to the National Association for Business Economics on October 12, 2009: "For the foreseeable future, lack of demand will be the major constraint on output and employment in the American economy,' http://whitehouse.gov.
32. Harvard Professor and former IMF Chief Economist Ken Rogoff has written about the "new normal" for growth being "a notably lower average growth rate than they enjoyed before the crisis." Rogoff, The New Normal Growth," http://projectsyndicate.org.
33. And Paul Krugman has written, "[T]he job market will remain terrible for years to come." Krugman, "Mission Not Accomplished," New York Times, October 2, 2009.
34. Palley, "America's Exhausted Paradigm."
35. Kate Bronfenbrenner and Stephanie Luce, Uneasy Terrain, Report United States Trade Deficit Review Commission, Washington, D.C., September 2000,
36. and The Changing Nature of Corporate Global Resturcturing, Report, U.S.China Economic and Security Review Comission, Washington, D C, October 2004.
37. See, for instance, Thomas I. Palley, Plenty of Nothing: The Downsizing of the American Dream and the Case for Structural Keynesianism (Princeton: Princeton University Press, 1998), chap-ters.
38. Simon Johnson and James Kwak, "Its Crunch Time," Washington Post, September 29, 2009;
39. Simon Johnson, The Quiet Coup," The Atlantic Monthly, May 2009.
40. See citations in endnote 11.
41. See Paul Sweezy, "Crisis Within the Crisis," Monthly Review 30, no.7 (December 1978), 7-10;
42. and Harry Magdoff and Paul M. Sweezy, "Debt and the Business Cycle," Monthly Review 30, no. 2 (June 1978), 1-11
43. -both reprinted in Harry Magdoff and Paul M. Sweezy, The Deepening Crisis of U.S. Capitalism (New York: Monthly Review Press, 1981), 70-80, 90-93 .