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Working Paper No. 796 | April 2014

Minsky and the Subprime Mortgage Crisis

The Financial Instability Hypothesis in the Era of Financialization

The aim of this paper is to develop a structural explanation of the subprime mortgage crisis, grounded on the combination of two apparently incompatible financial theories: the financial instability hypothesis by Hyman P. Minsky and the theory of capital market inflation by Jan Toporowski. Our thesis is that, once the evolution of the financial market is taken into account, the financial Keynesianism of Minsky is still a valid framework to understand the events leading to the crisis.

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Book Series
Classical Economics Today: Essays in Honor of Alessandro Roncaglia
Edited by Marcella Corsi, Jan Kregel, and Carlo D'Ippoliti
Author(s): Jan Kregel
March 2018

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