A short interview with Professor L. Randall Wray, scholar at the Levy Institute, on the work of economist Hyman Minsky. Minsky’s work on financial fragility has become well-known since the financial crisis which began in 2007. He argued that ‘stability is destabilizing’: a stable economy and financial system will tend over time to lead investors to take on increasing levels of risk, which will eventually lead to a crisis. In the absence of ‘Big Government’ (fiscal policy) and a ‘Big Bank’ (the central bank), a depression is likely.
Wray has written a very readable book on the work of Minsky, Why Minsky Matters, which I reviewed for the Rethinking Economics project. Unfortunately they seem to have revamped their website and the review is nowhere to be found! I will post it on this blog tomorrow for those who are interested.