The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.I hope Minsky means not that a period of prolonged prosperity gives people enough time to do things that move the economy from stability to instability, but rather that decisions are made and things are done specifically to prolong the prosperity, and these decisions and things have the effect of moving the economy from stability to instability.
CNN, 9 January 2024, has Trump saying "I don’t want to be Herbert Hoover." CNN adds: "The US
stock market crashed during former President Herbert Hoover’s first year in office in 1929, which
signaled the beginning of the Great Depression." See my work on the Trump Depression
Monday, January 21, 2019
Minsky's second
In a recent post I quoted Minsky:
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