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

Ambivalent feelings about staying or leaving

Do you want to stay in one place and be rooted to ground yourself in a specific environment? Do you want to be leaving and go to different places to elevate yourself? Can you do both at the same time? Yes you can do both, do not ever think that where you are is static, the place is constantly changing and it is within the details that you can find new meaning for oneself and if this is not enough, plan time in and go to come back different..

Jazzing our way towards a powerful community

The Tamarack Institute sent today an invitation to attend their ABCD Community of Practice session on Wednesday 29.09.21 . The session will centre around John McKnight, Co-founder, Asset-Based Community Development Institute and Senior Associate at the Kettering Foundation latest learning bulletin called ABCD, Jazz and the Structure of Powerful Communities. In the learning, he present the local innovations which occured in neighbourhood over the pandemic though dispersed actors and then go on to introduce the invisible neighbourhood structure which enable innovative citizenships to emerge. The three elements that creates this specific context are: 1. Communality - the place, the desire tot celebrate, entertain and enjoy 2. Individual Capacities - Every neighbour has the belief that they have special gifts, talents or knowledge to share 3. Connectivity - the consideration that all local capacities are latent and what brings them to life is connectivity. Through connections the capacitie...

How my relationship with capitalism is impacting my carbon footprint?

Published on Footpaths Leicester Capitalism is an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. My carbon footprint is the amount of carbon dioxide released into the atmosphere as a result of my activities. My activities serve capitalism. They serve private owners for profit at the expense of natural resources and human beings. I am trapped and enslaved by capitalism, this is my relationship with it and it impacts dearly on my carbon footprint but also on my wellbeing and sense of belonginess. I am striving to strip myself away from capitalism. I refused to work for large corporate organisations. I refuse to consume excessively. I shop in charity shops, buy in bulk from the Wholefood Coop in Leicester, cycle to work, do not travel by plane. I try to save for some solar panels and an electric car, I try to repair what I own and try to engage others in changing behaviour through campaigning...