Hyman P. Minsky (1919-1996) sought to formalize Keynes’s view of the animal spirits of the market through his Financial Instability Hypothesis (FIH), which classifies business enterprises by debt level. Well-run firms only borrow when they expect operating revenue to cover the full cost of borrowing, including both interest and repayment of the principal. Minsky called […]
After the 2007-2009 financial crisis, the Great Recession it precipitated, the exceptionally sluggish recovery, and now the pandemic recession, the U.S. has essentially entered a new macroeconomic environment. For most of the 2010s, there was a general consensus that inflation was not too much of a problem. This very complacency has now set the stage […]
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