The Current Financial Crisis, Monetary Policy, and Minsky's Structural Instability Hypothesis

Domenica Tropeano

International Journal of Political Economy, 2010, vol. 39, issue 2, 41-57

Abstract: The object of this work is to evaluate the monetary policy issues that arose during the financial crisis of 2007-8 according to Minsky's thought. It is argued that Minsky's idea of structural instability may fit the policy problems linked to the crisis. In particular, Minsky's contribution to the theory of central banking is used to evaluate the conduct of the Federal Reserve during the crisis. Minsky's reading of the roles of the central bank in the presence of sophisticated markets and securitization is helpful in understanding both the failure of the Federal Reserve in preventing the crisis and the relative success in mitigating the effects. This apparent success notwithstanding, the paper warns that economic policy, to promote stability, must enlarge the stability field of the system by changing the type of institutions operating there and their business habits.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.2753/IJP0891-1916390204 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The current financial crisis, monetary policy and Minsky's structural instability hypothesis (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:ijpoec:v:39:y:2010:i:2:p:41-57

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MIJP20

DOI: 10.2753/IJP0891-1916390204

Access Statistics for this article

More articles in International Journal of Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().