Origins of economic instability: Real, financial or both? - Part I: An account of Minsky's financial instability hypothesis
The 1990s have put the issue of global economic stability under the spotlight. This calls for a re-examination of the economic theory surrounding the subject. Here a three-fold classification is useful. The first grouping locates the source of stability in the workings of the real sector of the econ...
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Published in | South African journal of economic and management sciences Vol. 2; no. 1; pp. 1 - 20 |
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Main Author | |
Format | Journal Article |
Language | English |
Published |
AOSIS
01.03.1999
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Online Access | Get full text |
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Summary: | The 1990s have put the issue of global economic stability under the spotlight. This calls for a re-examination of the economic theory surrounding the subject. Here a three-fold classification is useful. The first grouping locates the source of stability in the workings of the real sector of the economy. A second, following Hyman Minsky, contends that instability arises in the financial sector. A third grouping draws on a distinction by Schumpeter to argue that any effective analysis of stability or instability requires a theoretical framework that integrates both the real and financial sectors at the most basic level. In the light of the current financial crisis which originated in South-East Asia, the second grouping appears most relevant. Part II will give an appraisal of Minsky's theory. |
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ISSN: | 1015-8812 2222-3436 |
DOI: | 10.4102/sajems.v2i1.2560 |