Published on Mar 30, 2017
This lecture covers how Hyman Minsky developed his “Financial Instability Hypothesis” to answer the question “Can “It”—a Great Depression—happen again?”, by combining insights from Marx, Fisher, Schumpeter, Kalecki, and finally Keynes. I show how his model can be explained simply by working from the macroeconomic definitions of employment, income distribution, and debt. It is, at its heart, the simplest possible complex systems explanation of how a market economy with debt can fall into a Great Depression. The Global Financial Crisis is a prediction of Minsky’s theory, versus being an inexplicable anomaly for mainstream Neoclassical economics.
