American economist Hyman Minsky, who died in 1996, grew up during the Great Depression, an event which shaped his views and set him on a crusade to explain how it happened and how a repeat could be prevented, writes Duncan Weldon. Minsky spent his life on the margins of economics but his ideas suddenly gained currency with the 2007-08 financial crisis. To many, it seemed to offer one of the most plausible accounts of why it had happened.
His long out-of-print books were suddenly in high demand with copies changing hands for hundreds of dollars – not bad for densely written tomes with titles like Stabilizing an Unstable Economy. Senior central bankers including current US Federal Reserve chair Janet Yellen and the Bank of England’s Mervyn King began quoting his insights. Nobel Prize-winning economist Paul Krugman named a high profile talk about the financial crisis The Night They Re-read Minsky.
Filed under: Big Banks, Financial Crisis, History, The Great Depression
