A good lecture by Marc Lavoie on whether Hyman Minsky was a Post-Keynesian. The answer is in the end and I won’t give out the answer!
One of the points Marc discusses when discussing the financial instability hypothesis is that Minsky’s analysis avoids discussing dynamic effects: a rise in production of firms leads to a rise in demand for their products because of incomes generated and will hence generate profits for firms. Hence firms’ debt ratios needn’t worsen necessarily. Minsky’s narrative makes it look like it is always worsening. Also Minsky assumes that the rise in supply of debts will raise interest rates, which has a sound of the loanable funds model to it.
Which is no to say that the hypothesis is irrelevant but just that a better articulation is required.
Marc Lavoie at Poznan Summer School 2018
The video was live at the Review Of Political Economy‘s page on Facebook but still available.
Some background papers on this:
- Minsky’s Financial Fragility Hypothesis: A Missing Macroeconomic Link?, Marc Lavoie and Mario Seccareccia, 2001.
- Loanable Funds, Endogenous Money and Minsky’s Financial Fragility Hypothesis, Marc Lavoie, 1997.
There’s now a paper, Was Hyman Minsky A Post-Keynesian Economist?, at Review Of Evolutionary Political Economy.