Hyman P. Minsky

Distinguished Scholar

Financial economist Hyman P. Minsky was a Levy Institute distinguished scholar from 1990 until his death in 1996. He was responsible for establishing two of the Institute's ongoing research programs: Monetary Policy and Financial Structure, and The State of the U.S. and World Economies.

Minsky was born in Chicago in 1919 and studied at the University of Chicago and Harvard University. At Harvard he served as a teaching assistant to Alvin Hansen, one of the leading disciples of John Maynard Keynes in the United States. Minsky went on to teach at Carnegie Tech (now Carnegie Mellon University) and Brown University, and from 1957 to 1965 was an associate professor of economics at the University of California, Berkeley. It was at Berkeley that he developed his major theories about lending and economic activity, views he laid out in the books John Maynard Keynes (1975) and Stabilizing an Unstable Economy (1986). From 1965 until his retirement in 1990, Minsky was professor of economics at Washington University in St. Louis.

Although he considered himself a Keynesian, Minsky was uncomfortable with the way most mainstream economists interpreted Keynes. He rejected conventional economic ideas such as the efficient market hypothesis in favor of what he called the financial instability hypothesis. Minsky held that, over a prolonged period of prosperity, investors take on more and more risk, until lending exceeds what borrowers can pay off from their incoming revenues. When overindebted investors are forced to sell even their less-speculative positions to make good on their loans, markets spiral lower and create a severe demand for cash—an event that has come to be known as a "Minsky moment."

Minsky held a B.S. in mathematics from the University of Chicago (1941) and an M.P.A. (1947) and a Ph.D. in economics (1954) from Harvard. He was a recipient in 1996 of the Veblen-Commons Award, given by the Association for Evolutionary Economics in recognition of his exemplary standards of scholarship, teaching, public service, and research in the field of evolutionary institutional economics.

Minsky was the author of four major books and a contributor to numerous others, and he published extensively in academic journals. His writings include:

• Stabilizing an Unstable Economy, 1986 (reissued 2008)
• Can "It" Happen Again? Essays on Instability and Finance, 1982
• John Maynard Keynes, 1975 (reissued 2008)
• Poverty: The Aggregate Demand Solution and Other Non-welfare Approaches, 1965
• "Business Cycles in Capitalist Economies," Jobs & Capital (Milken Institute), February 1994
• "Financial Instability Hypothesis," in Handbook of Radical Political Economy, ed. P. Arestis and M. Sawyer, 1993
• "The Financial Instability Hypothesis: A Clarification," in Risk of Financial Crisis, ed. M. Feldstein, 1991
• "Debt and Business Cycles" (with M. D. Vaughan), Business Economics, July 1990
• "Schumpeter Finance and Evolution," in Evolving Technology and Market Structure, ed. A. Heertje and M. Perlman, 1990
• "Sraffa and Keynes: Effective Demand in the Long Run," in Essays on Piero Sraffa: Critical Perspectives on the Revival of Classical Theory, ed. K. Bharadwaj and B. Schefold, 1990
• "The Macroeconomic Safety Net: Does It Need to be Improved?" in Modern International Environment, ed. H. P. Gray, 1989
• "The Global Consequences of Financial Deregulation," Marcus Wallenberg Papers on International Finance, 1986
• "Beginnings," Banca Nazionale del Lavoro Quarterly Review, September 1985
• "The Financial-Instability Hypothesis: Capitalist Processes and the Behavior of the Economy," in Financial Crises: Theory, History and Policy, ed. C. Kindleberger and J.-P. Laffargue, 1982
• "The Financial Instability Hypothesis: A Restatement," Thames Papers on Political Economy, 1978
• "A Theory of Systemic Fragility," in Financial Crises: Institutions and Markets in a Fragile Environment, ed. E. Altman and A. Sametz, 1977
• "The Modelling of Financial Instability: An introduction," in Modelling and Simulation: Proceedings of the Fifth Annual Pittsburgh Conference, 1974
• "Longer Waves in Financial Relations: Financial Factors in the More Severe Depressions," American Economic Review, May 1964
• "Can 'It' Happen Again?" in Banking and Monetary Studies, ed. D. Carson, 1963
• "Central Banking and Money Market Changes," Quarterly Journal of Economics, May 1957

See all Hyman P. Minsky's Levy Institute Publications