Hyman Minsky’s financial theory of investment rests on a bifurcation of an economy’s price systems. On the one hand, there’s the price system for goods and services. And inflation here is what central banks look to hold in check. But at the same time, there is a wholly separate price system for assets. And it’s here where stability leads to asset price inflation, a build up in debt, instability, and, eventually, crisis.
Economics professor Randall Wray is a real Minsky scholar. He studied under Minsky at Washington University in St. Louis. And last year, he wrote a book “Why Minsky Matters: An Introduction to the Work of a Maverick Economist“. Here’s what Wray says about Minsky’s two price systems:Credit Writedowns
Hyman Minsky And Asset Price Inflation Versus Consumer Price Inflation
Edward Harrison
