15 Facts About Hyman Minsky

Hyman Philip Minsky was an American economist, a professor of economics at Washington University in St Louis, and a distinguished scholar at the Levy Economics Institute of Bard College.

Hyman Minsky's research attempted to provide an understanding and explanation of the characteristics of financial crises, which he attributed to swings in a potentially fragile financial system.

In 1937, Hyman Minsky graduated from George Washington High School in New York City.

Hyman Minsky taught at Brown University from 1949 to 1958, and from 1957 to 1965 was an associate professor of economics at the University of California, Berkeley.

Hyman Minsky was a consultant to the Commission on Money and Credit while at Berkeley.

Hyman Minsky proposed theories linking financial market fragility, in the normal life cycle of an economy, with speculative investment bubbles endogenous to financial markets.

Hyman Minsky stated that in prosperous times, when corporate cash flow rises beyond what is needed to pay off debt, a speculative euphoria develops, and soon thereafter debts exceed what borrowers can pay off from their incoming revenues, which in turn produces a financial crisis.

Hyman Minsky's theories have enjoyed some popularity, but have had little influence in mainstream economics or in central bank policy.

Hyman Minsky stated his theories verbally, and did not build mathematical models based on them.

Hyman Minsky argued that a key mechanism that pushes an economy towards a crisis is the accumulation of debt by the non-government sector.

Hyman Minsky identified three types of borrowers that contribute to the accumulation of insolvent debt: hedge borrowers, speculative borrowers, and Ponzi borrowers.

Hyman Minsky argues that due to tax laws and the way markets capitalized on income, the value of equity in indebted firms was higher than conservatively financed ones.

Hyman Minsky noted that the rise of money management, trading huge multi-million dollar blocks every day, led to an increase in securities and people taking financial positions to gain a profit.

Hyman Minsky noted that financial institutions had become so far removed from the financing of capital development at this point, but rather committed large cash flows to 'debt validation.

Hyman Minsky put forth his own interpretation of the General Theory, one which emphasized aspects that were de-emphasized or ignored by the neoclassical synthesis, like Knightian uncertainty.