Publication Date


Document Type

Working Paper


Professor John Hall

Journal of Economic Literature Classification Codes

B3, E3, P1

Key Words

Capitalist Systems, Financial Cycles, Financial Instability Hypothesis, Hyman Minsky, John Maynard Keynes


Hyman Minsky can readily be categorized as a post-Keynesian economist, for he advances a purist’s interpretation of John Maynard Keynes’ The General Theory of Employment, Interest and Money. Through employing a rigorous Keynesian framework, Minsky developed an enduring contribution to the literature bearing the title: “The Financial Instability Hypothesis” (1992), that appears as Working Paper No. 74 at the Jerome Levi Institute. In this document Minsky considered forces and variables that induce financial instability—that are also specific to advanced capitalist economies. He challenges the classical economists and the notion that a general equilibrium will prevail. Instead, Minsky goes on to teach us that the actions of businesses, banks and government, working hand-in-hand, serve to perpetuate cyclical, financial instability—defined by inflationary and deflationary periods.

Persistent Identifier