Hyman Philip Minsky

Hyman Philip Minsky

American economist
Date of Birth: 23.09.1919
Country: USA

  1. Biography of Hyman Minsky
  2. Minsky's Contributions and Ideas
  3. Legacy and Criticism

Biography of Hyman Minsky

Hyman Philip Minsky was born on September 23, 1919, in Chicago, Illinois, to a family of Belarusian emigrants. His mother, Dora Zakon, was actively involved in the emerging labor movement, while his father, Sam Minsky, had an interest in the prosperity of the Jewish bloc of the Socialist Party of Chicago.

Minsky obtained his bachelor's degree in mathematics from the University of Chicago in 1941 and continued his education, earning a master's degree in 1947 and a PhD from Harvard University in 1954, where he studied under Joseph Schumpeter and Wassily Leontief. He taught at Brown University from 1949 to 1958 and was an associate professor of economics at the University of California, Berkeley from 1957 to 1965.

In 1965, Minsky became a professor of economics at Washington University in St. Louis, where he remained until 1990. He also served as a consultant to the National Monetary Commission while being an adjunct professor of economics at the University of California.

Minsky's Contributions and Ideas

Minsky was known for his research on financial crises and sought to understand and explain their characteristics. He is sometimes referred to as a post-Keynesian economist due to his support for government intervention in financial markets and his opposition to certain goals of modern deregulation policies in the 1980s, as well as debt accumulation.

Minsky's work on the slow movement of the financial system from stability to crisis brought him recognition, and the term "Minsky moment" refers to this aspect of his scientific research. His theories emphasized the macroeconomic dangers of speculative bubbles and highlighted the importance of the Federal Reserve System as a lender of last resort.

Despite the significance of his ideas, Minsky never developed a mathematical model based on his theory. Recently developed endogenous economic crisis models based on Minsky's theory by post-Keynesian economist Steve Keen are still in the research stage and have not been widely applied. However, Minsky's theories have gained interest in the political aftermath of the 2007-2010 financial crisis.

Minsky argued that the accumulation of debt in the non-government sector is a key mechanism that pushes the economy toward a crisis. He identified three types of borrowers - hedge, speculative, and Ponzi - that contribute to the accumulation of these debts. Minsky, along with Donald Markwell, believed that a serious approach to his ideas could lead to a more stable world.

Legacy and Criticism

Minsky sharply criticized orthodox Keynesianism and monetarism, which he described as viewing the modern economy as a "country fair." He recognized that the credit system is a powerful internal destabilizing factor in the complex monetary nature of the modern economy.

Hyman Minsky passed away on October 24, 1996, in Rhinebeck, New York. His ideas and research continue to shape discussions on financial crises and the role of government intervention in maintaining economic stability. While some criticize his lack of mathematical modeling, others recognize the relevance of his theories in understanding the dynamics of financial markets and their impact on the broader economy.