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A Veblenian View of Minsky's Financial Crisis Theory
Patrick R. Kelso,Barry L. Duman +1 more
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The authors compare and contrast the views of Hyman P. Minsky and Thorstein Veblen concerning the systematic development of financial crises in capitalistic economies and argue that Minsky seems to emphasize the evergrowing fragility of financial structures.Abstract:
Compares and contrasts the views of Hyman P. Minsky and Thorstein Veblen concerning the systematic development of financial crises in capitalistic economies. Advances the argument that Minsky and Veblen have both successfully met the challenge of providing a reasonable explanation for the speculative mania and related excesses critical to any theory of cyclical fluctuations. They agree that upturns tend to euphoria and ultimately, over‐capitalization and subsequent economic decline. Their rationales differ. Veblen stresses the effects of rising prices on collateral values and argues that the cumulative effect is over valued assets. Minsky seems to emphasize the ever‐growing fragility of financial structures. In the view of the authors, this article places Veblen′s contributions in a contemporary setting and ties Minsky more closely to the institutionalists.read more
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TL;DR: Veblen's analysis of the U.S. economy has been claimed and rejected both by sociologists and economists as being one of theirs as mentioned in this paper, but it has enduring value today.
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Futurity, Pro-cyclicality and Financial Crises
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Veblenian and Minskian financial markets
TL;DR: In this article, the authors provide an exposition of Veblen's and Minsky's views on the financial markets and explore the possibility of any common denominators, and stress that they both bring forward the importance of leverage as a path-breaking insight, as well as of liquidity and solvency in real world financial markets characterized by uncertainty, innovations and evolving institutions.
References
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Book
Stabilizing an Unstable Economy
TL;DR: In his seminal work, Minsky presents his groundbreaking financial theory of investment, one that is startlingly relevant today as mentioned in this paper, explaining why the American economy has experienced periods of debilitating inflation, rising unemployment, and marked slowdowns and why the economy is now undergoing a credit crisis that he foresaw.
Journal Article
Theory of business enterprise
TL;DR: Veblen's analysis of the U.S. economy has been claimed and rejected both by sociologists and economists as being one of theirs as mentioned in this paper, but it has enduring value today.
Book
Why is Economics not an Evolutionary Science
TL;DR: A reprint of the article "Why is economics not an evolutionary science?," by T. Veblen, published in the "Quarterly Journal of Economics" is presented in this paper.
Book
The Theory of Business Enterprise
TL;DR: Veblen's analysis of the U.S. economy has been claimed and rejected both by sociologists and economists as being one of theirs as discussed by the authors, but it has enduring value today.
Journal ArticleDOI
Famous First Bubbles
TL;DR: In this article, the authors consider market fundamental explanations for speculative events and conclude that "market fundamental explanations are often not easily generated due to the inherent complexity of economic phenomena; and our methodology should always require that we search intensively for market fundamental explanation before clutching the bubble" last resort".