My Minsky moment

So I’m going  to give a little introductory talk on Hyman Minsky next month here in Sydney. He’s been in the news a bit lately but, regrettably, everybody else misinterprets him grievously. All welcome, but it’s in a Surry Hills office building so let me know if you want to come and I’ll let you know the secret password – hand signal combination as well as the address. Also I can pass on the readings as pdfs. It’s a double bill with Steve Keen talking about Irving Fisher, and it’s a discussion group, so that after half-an-hour or so of us talking there’s an hour of sober discussion and then we go to a local pub. Here are the details:

MPS – Meeting XIII, Wednesday March 4 at 6.30pm

Selected Readings from Irving Fisher (1867-1957) and Hyman Minsky (1919-1996)
 
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
– Irving Fisher, Oct. 17, 1929 
 
“A fundamental characteristic of our economy is that the financial system swings between robustness and fragility and these swings are an integral part of the process that generates business cycles.”
– Hyman Minksy, 1974
 
Reading:

Irving Fisher

The Debt-Deflation Theory of Great Depressions
The Stock Market Panic in 1929
Fisher and Debt Deflation Lecture

 Hyman Minsky

Inflation, Recession, and Economic Policy, articles 1, 3 & 9
Stabilising an Unstable Economy, first couple of chapters (or as much as you can get through!)

Guest Speakers: Assoc Prof Steve Keen, UWS and Mike Beggs, PHD candidate at the University of Sydney (Steve will focus mostly on Fisher and Mike on Minsky)
 
Biographical
Irving Fisher
http://cepa.newschool.edu/het/profiles/fisher.htm 
http://en.wikipedia.org/wiki/Irving_Fisher
Hyman Minsky
http://cepa.newschool.edu/het/profiles/minsky.htm
http://en.wikipedia.org/wiki/Hyman_Minsky
 
Questions:
1.      How do you understand Fisher’s theory of debt deflation?
2.      What are the main elements of Minsky’s Financial Instability Hypothesis?
3.      Are there any major differences between Fisher and Minsky’s analyses?
4.      How do these theories help us understand the present crisis?
5.      What are the public policy implications of these analyses?
6.      Prepare a question for the group to discuss.

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Published in: on 6 February, 2009 at 9:54 am  Comments (2)  

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2 CommentsLeave a comment

  1. Hi, I’m reading about Fisher and Minsky and I wonder if there is any difference in their theories.

    Thanks,

    Nadia

  2. Hi Nadia,

    Minsky was inspired by Fisher’s concept of debt deflation and their treatments are very similar. Fisher’s original version in the 1930s was really tentative and suggestive, though, and Minsky worked it up into a more developed model.

    Minsky is best known for his work on financial crisis, which is so influenced by Fisher, but in fact Minsky was a much more general theorist of money and finance. He does have some influence from Fisher elsewhere – for example, he prefers Fisher’s MV=PT money quantity identity to Keynes’s Cambridge treatment of the demand for money. But on the whole, Minsky develops his theory out of Keynes, whereas Fisher was pre-Keynesian. That’s the big difference, and it’s a major difference of overall economic vision.


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