Minsky and the Subprime Mortgage Crisis: The Financial Instability Hypothesis in the Era of Financialization
AbstractThe aim of this paper is to develop a structural explanation of the subprime mortgage crisis, grounded on the combination of two apparently incompatible financial theories: the financial instability hypothesis by Hyman P. Minsky and the theory of capital market inflation by Jan Toporowski. Our thesis is that, once the evolution of the financial market is taken into account, the financial Keynesianism of Minsky is still a valid framework to understand the events leading to the crisis.
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Bibliographic InfoPaper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_796.
Date of creation: Apr 2014
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Hyman Minsky; Financial Instability Hypothesis; Jan Toporowski; Capital Market Inflation; Financialization; Financial Crisis; Subprime Mortgage Crisis;
Find related papers by JEL classification:
- B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
- B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- G01 - Financial Economics - - General - - - Financial Crises
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-11 (All new papers)
- NEP-GER-2014-04-11 (German Papers)
- NEP-HPE-2014-04-11 (History & Philosophy of Economics)
- NEP-MAC-2014-04-11 (Macroeconomics)
- NEP-MON-2014-04-11 (Monetary Economics)
- NEP-PKE-2014-04-11 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gary A. Dymski, 2010. "Why the subprime crisis is different: a Minskyian approach," Cambridge Journal of Economics, Oxford University Press, vol. 34(2), pages 239-255, March.
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wp149, Political Economy Research Institute, University of Massachusetts at Amherst.
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- Till van Treeck, 2007.
"A Synthetic, Stock-Flow Consistent Macroeconomic Model of Financialisation,"
IMK Working Paper
06-2007, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Till van Treeck, 2009. "A synthetic, stock--flow consistent macroeconomic model of 'financialisation'," Cambridge Journal of Economics, Oxford University Press, vol. 33(3), pages 467-493, May.
- Domenico Delli Gatti & Mauro Gallegati & Hyman P. Minsky, 1999.
"Financial Institutions, Economic Policy, and the Dynamic Behavior of the Economy,"
- Domenico Delli Gatti & Mauro Gallegati & Hyman P. Minsky, 1994. "Financial Institutions, Economic Policy, and the Dynamic Behavior of the Economy," Economics Working Paper Archive wp_126, Levy Economics Institute.
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