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Stabilizing an unstable economy (Chapters 1-2)
[Стабилизируя Нестабильную Экономику]

Author

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  • Minsky, Hyman (Мински, Хайман)

    (Self-employed)

Abstract

In the first chapter of his seminal book Hyman Minsky formulates methodological orientations in economic studies and general economic policies. The second chapter is devoted to the analysis of the period of financial instability in the United States since the late 1960's to early 1980's and the first recession 1973-1975. The author shows that due to the fiscal stimulus on the part of Big Government and the central bank as a lender of last-instance the US economy managed to avoid the depression and recession relatively quickly overcome. It happened not only because deficit financing budget expenditures supported the demand, but also because of increasing public debt act as a stabilizer of portfolios of creditors. During this period, it changed the character of the economic crisis and recession: instead of deep depression financial instability has taken a high and accelerating inflation form.

Suggested Citation

  • Minsky, Hyman (Мински, Хайман), 2016. "Stabilizing an unstable economy (Chapters 1-2) [Стабилизируя Нестабильную Экономику]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 2, pages 52-91, April.
    • Handle: RePEc:rnp:ecopol:ep1627
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    References listed on IDEAS

    as
    1. Milton Friedman, 1971. "A Theoretical Framework for Monetary Analysis," NBER Books, National Bureau of Economic Research, Inc, number frie71-1, March.
    2. Sargent, Thomas J. & Wallace, Neil, 1976. "Rational expectations and the theory of economic policy," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 169-183, April.
    3. Richard H. Day, 1983. "The Emergence of Chaos from Classical Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 201-213.
    4. Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-115, March.
    5. William C. Brainard & James Tobin, 1968. "Pitfalls in Financial Model-Building," Cowles Foundation Discussion Papers 244, Cowles Foundation for Research in Economics, Yale University.
    6. Blatt, John M, 1978. "On the Econometric Approach to Business-Cycle Analysis," Oxford Economic Papers, Oxford University Press, vol. 30(2), pages 292-300, July.
    7. Day, Richard H, 1982. "Irregular Growth Cycles," American Economic Review, American Economic Association, vol. 72(3), pages 406-414, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial instability hypothesis; the theory of the business cycle; the impact of public debt on the balance sheets; macroeconomic automatic stabilizers;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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