Perhaps no economist was more vindicated by the global financial crisis than Hyman P. Minsky (1919–96). Although a handful of economists raised alarms as early as 2000, Minsky’s warnings began a half-century earlier, with writings that set out a compelling theory of financial instability. Yet even today he remains largely outside mainstream economics; few people have a good grasp of his writings, and fewer still understand their full importance. Why Minsky Matters makes the maverick economist’s critically valuable insights accessible to general readers for the first time. L. Randall Wray shows that by understanding Minsky we will not only see the next crisis coming but we might be able to act quickly enough to prevent it.
As Wray explains, Minsky’s most important idea is that "stability is destabilizing": to the degree that the economy achieves what looks to be robust and stable growth, it is setting up the conditions in which a crash becomes ever more likely. Before the financial crisis, mainstream economists pointed to much evidence that the economy was more stable, but their predictions were completely wrong because they disregarded Minsky’s insight. Wray also introduces Minsky’s significant work on money and banking, poverty and unemployment, and the evolution of capitalism, as well as his proposals for reforming the financial system and promoting economic stability.
A much-needed introduction to an economist whose ideas are more relevant than ever, Why Minsky Matters is essential reading for anyone who wants to understand why economic crises are becoming more frequent and severe—and what we can do about it.
L. Randall Wray is professor of economics at the University of Missouri, Kansas City, and senior scholar at the Levy Economics Institute of Bard College. He is the author of many books, including Modern Money Theory and Understanding Modern Money. He was a student and colleague of Hyman Minsky.
"An accessible introduction to the economist who saw the global financial crisis coming."--Bookseller Buyer’s Guide
"Written in clear prose, with Minsky’s idiosyncratic ideas and language patiently explained, Wray provides the best general introduction to Minsky’s economics."--Edward Chancellor, Reuters Breaking Views
"I came away from the book with considerably more understanding of Minsky's views and a greater respect for them."--Arnold Kling, Econlib
"[A] crystal-clear summary of Minsky’s life’s work. . . . While Minsky is now quite well known, his contributions are still widely ignored or misunderstood. This makes Wray’s book a godsend. . . . By making his insights accessible to a general audience for the first time, Wray’s book has the potential to transform the future of economic policymaking and, with it, to create a better life for future generations."--Victoria Bateman, Times Higher Education
"A useful and accessible overview of both what Minsky said and--as the title puts it--why it matters."--Diane Coyle, The Enlightened Economist blog
"Why Minsky Matters . . . brings together the maverick economist’s work in a more accessible form."--Ishan Bakshi, Business Standard
"In Why Minsky Matters, Wray observers how Minsky’s commercial banking experience gave him a unique and invaluable macroeconomic perspective. . . . Why Minsky Matters serves up a rich variety of concepts that will stimulate and inform anyone concerned about the fate of the economy. If you want to know where we are going, it helps to know where we have come from, and Why Minsky Matters provides an essential road map for that journey--past, present, and future."--Financial Analysts Journal
"A highly readable overview of the contributions of Hyman Minsky, and justifies the title as to how Minsky matters."--Malcolm Sawyer, Journal of Economic Literature
Table of Contents:
1 Overview of Minsky’s Main Contributions 21
2 Where Did We Go Wrong? Macroeconomics and the Road Not Taken 47
3 Minsky’s Early Contributions: The Financial Instability Hypothesis 71
4 Minsky’s Views on Money and Banking 87
5 Minsky’s Approach to Poverty and Unemployment 109
6 Minsky and the Global Financial Crisis 137
7 Minsky and Financial Reform 163
8 Conclusion: Reforms to Promote Stability, Democracy, Security, and Equality 193
Further Reading 253
The Collected Writings of Hyman P. Minsky 257