Skip to main content

Keynes vs Minsky

I am a beginner in economics but reading Positive Money book 'Modernising Money' by Ben Dyson and Andrew Jackson. 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 imply 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:



Comments

Popular posts from this blog

Meeting with FlowFinder

Leicester Fixers met this week with FlowFinder to discuss areas of focus and next steps to consolidate what has been and do better moving forward. In the next few months, Leicester Fixers will do the following activities: redefine their vision, mission, objectives and value with the input of all the fixers. Here is a first draft Consider their delivery focus against their aims, objectives, funding streams and operations Develop their delivery plans A meeting will be organised to discuss some of the elements with people working together to repair and mend items.

Blacklist

It may be time to create a blacklist of companies to avoid and definitely refuse to  work for: - Those which are more than 3 miles than my home - Those which does not allow me to work from home - Those which does not allow me to work fewer hours - Those which pollute with no sorry - Those with negative employee reviews - Those which do not design products that are repairable - Those which do not put the wellbeing of their staff first what else, add to the list