Minsky — The Financial-Instability Hypothesis

This our weekly discussion of the price level as it relates to Perry Mehrling's money view. The price level is the average price of goods in terms of money or, equivalently, the price of money in terms of goods. But what determines the price level? Why is the price level important? And how does it fit into the money view?

The money view emphasizes money, banking, finance, and financial stability (or instability). How is price-level stability connected to financial stability? Can these two forms of stability coexist? To what extent is it possible to have one have one without the other? This week, we're reading and discussing a 1982 article by Minsky entitled "The Financial-Instability Hypothesis: Capitalist Processes and the Behavior of the Economy"

• The Financial-Instability Hypothesis: Capitalist Processes and the Behavior of the Economy