Did Hyman Minsky find the secret behind financial crashes?

[dipsydoodle]

American economist Hyman Minsky, who died in 1996, grew up during the Great Depression, an event which shaped his views and set him on a crusade to explain how it happened and how a repeat could be prevented, writes Duncan Weldon.

Minsky spent his life on the margins of economics but his ideas suddenly gained currency with the 2007-08 financial crisis. To many, it seemed to offer one of the most plausible accounts of why it had happened.

His long out-of-print books were suddenly in high demand with copies changing hands for hundreds of dollars - not bad for densely written tomes with titles like Stabilizing an Unstable Economy.

Senior central bankers including current US Federal Reserve chair Janet Yellen and the Bank of England's Mervyn King began quoting his insights. Nobel Prize-winning economist Paul Krugman named a high profile talk about the financial crisis The Night They Re-read Minsky.

Here are five of his ideas.

http://www.bbc.co.uk/news/magazine-26680993

[bananas]

1. Everyone's Freaked Out That China's 'Minsky Moment' Has Arrived

http://www.businessinsider.com/has-chinas-minsky-moment-has-arrived-2014-3

Everyone's Freaked Out That China's 'Minsky Moment' Has Arrived
Mamta Badkar
Mar. 21, 2014, 11:15 AM

After years of booming credit expansion, we're now seeing slower economic growth in China and a rising number of domestic bond defaults.

This has prompted many to ask has China's "Minsky moment" arrived?

The phenomenon is named after economist Hyman Minsky who articulated that periods of speculation and credit growth inflate assets, only to end in crisis.

Societe Generale's Wei Yao was one of the first to write this up a year ago.

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[fasttense]

2. Sounds like he is describing the inevitable crashes that come with capitalism.

If capitalism is so great why does it crash so often and why does it need to be regulated?

[Benton D Struckcheon]

3. Yep, built on the work of...

...Walter Bagehot, Irving Fischer, Schumpeter, and Keynes. Brilliant stuff, definitely worth reading.