Subprime Crisis and Instability of Global Financial Markets
In order to prescribe adequate remedies to treat the current financial crisis one has to understand what in the first place went wrong. An age ago, older generations wrote that disease could not be cured without an accurate diagnosis. In contrast to mainstream “efficient markets hypothesis” we argue that Minsky’s financial instability hypothesis gives numerous valuable insights into sources and possible consequences of current global financial crisis. Furthermore, two decades ago Hyman P. Minsky predicted possible developments and perils of ever growing process of securitization of illiquid assets.
References listed on IDEAS
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- L. Randall Wray, 2007.
"Lessons from the Subprime Meltdown,"
Economics Working Paper Archive
wp_522, Levy Economics Institute.
- Jan Kregel, 2008. "Minsky’s Cushions of Safety: Systemic Risk and the Crisis in the U.S. Subprime Mortgage Market," Economics Public Policy Brief Archive ppb_93, Levy Economics Institute.
- Jan Kregel, 2008. "Changes in the U.S. Financial System and the Subprime Crisis," Economics Working Paper Archive wp_530, Levy Economics Institute.
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"Yes, 'It' Did Happen Again: A Minsky Crisis Happened in Asia,"
Economics Working Paper Archive
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- Hyman P. Minsky & L. Randall Wray, 2008. "Securitization," Economics Policy Note Archive 08-2, Levy Economics Institute.
- L. Randall Wray & Eric Tymoigne, 2008. "Macroeconomics Meets Hyman P. Minsky: The Financial Theory of Investment," Economics Working Paper Archive wp_543, Levy Economics Institute.
- Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-115, March.
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