Forget the living canon of great economists – Paul Krugman, Joe Stiglitz, Larry Summers and the rest. Hyman Minsky was the only contemporary thinker to have predicted with uncanny precision the global financial crisis. This is no small achievement since Minsky died more than a decade before Lehman Brothers filed for bankruptcy. Minsky’s unorthodox vision of capitalism, with its emphasis on the central role of finance and the system’s inherent tendency to crash, was vindicated by the subprime crisis.
In a new book, “Why Minsky Matters: An Introduction to the Work of a Maverick Economist,” L. Randall Wray suggests that he would have approved of policymakers’ initial response to the crisis precipitated by Lehman’s collapse in the fall of 2008. However, by now, Minsky would be fretting that another “Minsky moment” is not far away and pondering what lies ahead....Reuters
Review: Another “Minsky moment” may be on the way
By Edward Chancellor
ht Michael Stephens at Multiplier Effect
Larry Summers a great economist? He pushed for relaxing bank regulation just before the 2007/8 crisis. Blunder No.1.
ReplyDeleteThen in his original “secular stagnation” speech (link below) he didn’t get the point (obvious to every MMTer) that there’s no limit to the amount of stimulus a government which issues its own currency can implement. Blunder No.2.
https://m.facebook.com/notes/randy-fellmy/transcript-of-larry-summers-speech-at-the-imf-economic-forum-nov-8-2013/585630634864563