Hyman Minsky
Hyman Philip Minsky (September 23,1919 - October 24,1996) was an American economist, a professor of economics at Washington University in St. Louis. He was born in Chicago, Illinois.
Minsky gave an explanation of financial crises, caused by swings in a potentially fragile financial system. Minsky is sometimes described as a post-Keynesian economist because, like Keynes, he supported some government intervention in financial markets. He opposed some of the financial deregulation policies popular in the 1980s. He supported the Federal Reserve as a" lender of last resort" (which means he thought it right for the Fed to bail out banks which might go bust). He argued against too much private debt in the financial markets.
Financial theory
Minsky proposed theories were about the normal life cycle of an economy. He linked financial market fragility with speculative investment bubbles in financial markets. Minsky claimed that in prosperous times, when companies make plenty of money, an irrational euphoria develops. Soon debts exceed what borrowers can pay off from their income, which produces a financial crisis. As a result, banks and lenders tighten credit, even to companies that can afford loans. Then the economy contracts.
This slow movement of the financial system from stability to fragility, followed by crisis, is something for which Minsky is best known, and the phrase" Minsky moment" refers to it.
At the University of California, Berkeley seminars attended by Bank of America executives helped him to develop his theories. His views were published in two books, John Maynard Keynes (1975), a classic study of the economist and his contributions, and Stabilizing an Unstable Economy (1986), and more than a hundred professional articles.
References
1919 births
1996 deaths
American economists
Jewish American academics
Jewish American scientists
Educators from Chicago
Scientists from Chicago