IDEAS home Printed from
   My bibliography  Save this article

Market processes and thwarting systems


  • Ferri, Piero
  • Minsky, Hyman P.


This paper suggests that there are two longstanding views on business cycles and economic dynamics: One emphasizes endogenous stability plus exogenous disturbances, while the other focuses on endogenous instability plus institutional 'containing' or "thwarting" mechanisms. The latter tradition regards business cycles and economic instability as the natural and inherent consequence of self-interest-motivated behavior in complex economies with sophisticated financial institutions. In fact, it is the interaction between the system's endoge-nous dynamics and the effects of institutions and interventions which, if "apt," constrains the outcomes of capitalist market processes to acceptable outcomes. The endogenous instability view of the economy, in which institutional structures and interventions stabilize the fragile, essentially refutes Lucas: He asserts that the economy is a mechanism that transforms exogenous shocks (either random or unanticipated policy interventions) into business cycles, thus generating a growth equilibrium. Recent history has illustrated the flaws of laissez-faire theory as the postwar capitalist economies that have enjoyed consistently high levels of growth are big government interventionist economies. The challenge for the future is recognizing that market processes are deficient not only in their ability to maintain aggregate demand, but also as devices for assuring productive investment and a tolerable distribution of income.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ferri, Piero & Minsky, Hyman P., 1992. "Market processes and thwarting systems," Structural Change and Economic Dynamics, Elsevier, vol. 3(1), pages 79-91, June.
  • Handle: RePEc:eee:streco:v:3:y:1992:i:1:p:79-91

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Cella, Guido, 1984. "The Input-Output Measurement of Interindustry Linkages," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 46(1), pages 73-84, February.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Kosta Josifidis & Alpar Lošonc & Novica Supić, 2010. "Neoliberalism: Befall or Respite?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(1), pages 101-117, March.
    2. Charles J. Whalen, 2012. "Money manager capitalism," Chapters,in: Handbook of Critical Issues in Finance, chapter 34, pages i-ii Edward Elgar Publishing.
    3. Passarella, Marco, 2012. "A simplified stock-flow consistent dynamic model of the systemic financial fragility in the ‘New Capitalism’," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 570-582.
    4. Eric Tymoigne, 2006. "The Minskyan System, Part II: Dynamics of the Minskyan Analysis and the Financial Fragility Hypothesis," Economics Working Paper Archive wp_453, Levy Economics Institute.
    5. Jan Toporowski, 2013. "The Elgar Companion to Hyman Minsky," Review of Political Economy, Taylor & Francis Journals, vol. 25(1), pages 175-177, January.
    6. Leszek Kąsek & Marek Lubiński, 2010. "hyman," Contemporary Economics, University of Finance and Management in Warsaw, vol. 4(1), March.
    7. Thomas I. Palley, 2011. "A Theory of Minsky Super-cycles and Financial Crises ," Contributions to Political Economy, Oxford University Press, vol. 30(1), pages 31-46.
    8. Piero Ferri, 2011. "Macroeconomics of Growth Cycles and Financial Instability," Books, Edward Elgar Publishing, number 14260.
    9. K. Vela Velupillai, 2010. "The 'Minsky Moment' - A Critique and a Re-construction," ASSRU Discussion Papers 1009, ASSRU - Algorithmic Social Science Research Unit.
    10. Dimitri B. Papadimitriou & L. Randall Wray, 2001. "Minsky's analysis of financial capitalism," Chapters,in: Financial Keynesianism and Market Instability, chapter 7 Edward Elgar Publishing.
    11. Charles J. Whalen, 2007. "The U.S. Credit Crunch of 2007: A Minsky Moment," Economics Public Policy Brief Archive ppb_92, Levy Economics Institute.
    12. Passarella, Marco, 2011. "From the village fair to Wall Street. The Italian reception of Minsky’s economic thought," MPRA Paper 49593, University Library of Munich, Germany.
    13. Papadimitriu, Dimitri & Wray, Randall, 2016. "Hyman Minsky's "Stabilizing an unstable economy" - twenty years later," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 2, pages 22-51, April.
    14. Mehrling, Perry, 1999. "The vision of Hyman P. Minsky," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 129-158, June.
    15. Christine Sinapi, 2011. "Institutional Prerequisites of Financial Fragility within Minsky's Financial Instability Hypothesis: A Proposal in Terms of 'Institutional Fragility'," Economics Working Paper Archive wp_674, Levy Economics Institute.
    16. Piero Ferri, 2010. "Growth Cycles and the Financial Instability Hypothesis (FIH)," Chapters,in: The Elgar Companion to Hyman Minsky, chapter 11 Edward Elgar Publishing.
    17. Christian Heebøll-Christensen, 2011. "Financial Instability - a Result of Excess Liquidity or Credit Cycles?," Discussion Papers 11-21, University of Copenhagen. Department of Economics.
    18. Greg Hannsgen & Tai Young-Taft, 2015. "Inside Money in a Kaldor-Kalecki-Steindl Fiscal Policy Model: The Unit of Account, Inflation, Leverage, and Financial Fragility," Economics Working Paper Archive wp_839, Levy Economics Institute.
    19. Steven M. Fazzari & Pietro E. Ferri & Edward G. Greenberg & Anna Maria Variato, 2013. "Aggregate demand, instability, and growth," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(1), pages 1-21, January.
    20. André Luís C. de Lourenço, 2005. "O Pensamento De Hyman P. Minsky: Alterações De Percurso E Atualidade," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] 009, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    21. L. Randall Wray, 2011. "Lessons We Should Have Learned from the Global Financial Crisis but Didn't," Economics Working Paper Archive wp_681, Levy Economics Institute.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:3:y:1992:i:1:p:79-91. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.