Hyman Minsky

Hyman P. Minsky ( Minsky Hyman Philip, born September 23, 1919 in Chicago, † 24 October 1996 in Rhinebeck, NY) was an American economist. He is known as Post-Keynesians.

Life and work

Minsky's parents had immigrated from Belarus to the U.S. labor activists. Minsky, who witnessed as a child the world economic crisis, graduated from Harvard University with Joseph Schumpeter, and later was a professor of economics at Washington University in St. Louis. He was considerably influenced by the theories of John Maynard Keynes, about whom he wrote a book.

His theses of the sudden crisis, despite a booming economy has long remained unnoticed, but experienced in the banking crisis in 2007, a surprising confirmation. The terms " Minsky 's Paradox ", " Minsky Moment ", " Minsky collapse " or " Minsky Meltdown " were born. Moreover, Minsky was involved in the development of the post-Keynesian theory of inflation.

In Minsky's theory of crisis, which also influenced Charles P. Kindleberger, operate the investors at the beginning of a cycle first a basis for the funding; the revenues that follow the investments are sufficient to repay the loans. If it appears that the economic growth to be stable, a speculative financing appears profitable. The revenue now range from only to service the interest on the mortgage debt; the loans themselves, however, are replaced by new borrowing. Finally, the investors go through a Ponzi scheme, a " Ponzi scheme" ( named after Charles Ponzi ). Now even be taken out to finance the interest burden loans as investors still have confidence that at the very end the income from the investment sufficient to meet all accrued obligations. Overall, the economy is still unstable, until it comes to a bursting of the speculative bubble and the onset of a financial crisis.

Minsky argued that the funding processes of a capitalist economy develop endogenous destabilizing forces. He held the financial institutions of capitalism for " ruinous by itself ." Therefore, he advised them to accept that the area is limited more efficient and desirable free markets.

Minsky's theses are contrary to the classical or neoclassical theory, according to which the markets by itself tend to equilibrium, provided that certain necessary conditions are met (such as perfect competition and information symmetry), but this is not always guaranteed in practice. In March 2012 there was a blog debate between Steve Keen and Paul Krugman on the central role of the banking system for economic understanding in Minsky's theory.

Publications

• John Maynard Keynes. 1975 John Maynard Keynes. Funding processes, investment and instability of capitalism. Metropolis, Marburg, 1990, ISBN 3-926570-06-7; 2nd edition ibid. 2007, ISBN 978-3-89518-656-1

• The hypothesis of financial instability: Capitalist processes and the behavior of the economy. Translated from English by Michaela grave Inger
• Financial instability: The economics of disaster. Translated from English by Florian Oppermann