Skip to main content

Keynes vs Minsky

I am truly a beginner in economics. By reading Positive Money book 'Modernising Money' by Ben Dyson and Andrew Jackson, my eyes and brain are getting wide open to new possibilities. My interest grew in the work of Minsky and encouraged me to read more about Keynes.

Keynes economics promote the view that in the long run economics system converge into an equilibrium with the support of the government. Nevertheless you cannot help the role of banks in the system and wonder after reading the following quote:

“But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.” (Keynes, 1923)

This implied that economists did not comprehend why we had a financial crisis and collapse. Minsky with  his model 'Financial Instability Hypothesis' strive to answer this question. The idea in Minsky's work in a 'simplistic summary is that in very good environments economic decision will be made with an overconfidence of financial stability. Ultimately it motivate excess leverage that advance farther than a stable economy' (Coates, 2009)

We could summarize the whole in three words 

'STABILITY IS DESTABILISING'

Some links:

I will be grateful if you would comment this post and give me some indications on other good sources of information I could read on. Thank you!



Comments

Popular posts from this blog

What is your job you do?

What is your job you do? Where do your work? are probably the hardest questions to answer to in a short sentence. It is great when you have a title, it gives a splash of your awesomeness in the face of your interlocutor. I am 'Consultant Associate'. I am 'Customer InSight Officer'. I am 'Data analyst Manager'... ( in your face) . Where do I work? I am a flexi-travelling worker. I mainly work from home. BUT, I also work in various places in the Midlands (Leicester, Northampton), also London, I jet set to Paris and Amsterdam sometimes... ( splash in your face) ... Those two questions are set to gauge both interlocutors' status. It is quite sad, the longer the title and list of places you go to, the more you appear awesome. Truth to be told, I love working from home and have a family to come back to after a long day making decisions. In my own perspective, the question should be reframed to 'What are you passionate about?'  At least, you will connect mo...