Longer waves in financial relations: financial factors in the more severe depressions II

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Author: Hyman P. Minsky
Date: Mar. 1995
From: Journal of Economic Issues(Vol. 29, Issue 1)
Publisher: Association for Evolutionary Economics
Document Type: Article
Length: 5,841 words

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Abstract :

The assertions of a 1964 model explaining the relationship of financial panics and depressions with mechanisms in capitalist economies are still valid. The model is premised on two postulates, the Financial Instability hypothesis and the postulate that payment commitments trigger a debt deflation process which, in turn, results in cycles of depressions. The occurences of financial panics and depressions are, therefore, inherent in capitalist economies. Depressions, however, are dissimilar due to institutional changes caused by legislation and endogenous factors.

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Gale Document Number: GALE|A16791199