Original Research
Origins of economic instability: Real, financial or both? - Part I: An account of Minsky's financial instability hypothesis
South African Journal of Economic and Management Sciences | Vol 2, No 1 | a2560 |
DOI: https://doi.org/10.4102/sajems.v2i1.2560
| © 2018 J. S. Hart
| This work is licensed under CC Attribution 4.0
Submitted: 03 July 2018 | Published: 31 March 1999
Submitted: 03 July 2018 | Published: 31 March 1999
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J. S. Hart, Department of Economics, University of Natal,Full Text:
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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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