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Does the United States Face Another Minsky Moment?

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  • L. Randall Wray

Abstract

It is beginning to look a lot like déjà vu in the United States. According to Senior Scholar L. Randall Wray, the combination of overvalued stocks, overleveraged banks, an undersupervised financial system, high indebtedness across sectors, and growing inequality together should remind one of the conditions of 1929 and 2007. Comparing the situations of the United States and China, where the outgoing central bank governor recently warned of the fragility of China's financial sector, Wray makes the case that the United State is far more likely to "win" the race to the next "Minsky moment." Instead of sustainable growth, we have "bubble-ized" our economy on the back of an overgrown financial sector--and to make matters worse, he concludes, US policymakers are ill-prepared to deal with the coming crisis.

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  • L. Randall Wray, 2018. "Does the United States Face Another Minsky Moment?," Economics Policy Note Archive 18-1, Levy Economics Institute.
    • Handle: RePEc:lev:levypn:18-1
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    References listed on IDEAS

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    1. L. Randall Wray, 2016. "Why Minsky Matters: An Introduction to the Work of a Maverick Economist," Economics Books, Princeton University Press, edition 1, number 10575.
    2. Flavia Dantas & L. Randall Wray, 2017. "Full Employment: Are We There Yet?," Economics Public Policy Brief Archive ppb_142, Levy Economics Institute.
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    Cited by:

    1. Michalis Nikiforos & Gennaro Zezza, 2018. "'America First,' Fiscal Policy, and Financial Stability," Economics Strategic Analysis Archive sa_apr_18, Levy Economics Institute.

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