Ian Rogers wrote:
> The third article cited above is is also an indirect response to the
> post by Mike Beggs earlier this week (under the topic of "The Big
> One") on the habit of Australian media making use of "second hand
> Minsky". In my case there's a lot of Minsky, and followers of Minsky,
> informing my study of capital markets. (I will point out I make a
> living writing on banking, though mainly only in respect of Australia
> and New Zealand).
Thanks for all that, Ian. I just subscribed to your newsletter.
I hope I didn't give the impression I thought 'secondhand Minsky' was a bad thing. I like Minsky a lot, my doctoral thesis-in-progress is a Minskyan analysis of Australian monetary policy.
My point is only that Minsky's 'financial instability hypothesis' has become popularised in a one-sided way. Everyone associates Minsky with 'Ponzi finance', but what he wrote about central bank reactions to financial instability is much less well-known, and in my opinion the most interesting stuff. Minsky was a theorist of commodity price inflation as much as he was a theorist of asset price inflation and deflation, and his main point on the seventies was that the Fed's hand was often forced by financial collapses, undermining counter-inflation policy.
I totally agree with you that the main story at the moment is in banking and money markets rather than the sharemarket.
Cheers, Mike Beggs scandalum.wordpress.com
---------------------------------------------------------------- This message was sent using IMP, the Internet Messaging Program.