You are now entering the Jewish Currents archive.
Economist Hyman Minsky, who analyzed the links between financial instability and speculative bubbles and presciently opposed government deregulation of financial markets, died at 77 on this date in 1996. Minsky was born in Chicago and studied at the University of Chicago and at Harvard. From 1957 to 1965 he was an associate professor of economics at the University of California, Berkeley, where he developed his major theories, as explained in John Maynard Keynes (1975) and Stabilizing an Unstable Economy (1986). From 1965 until his retirement in 1990, Minsky was professor of economics at Washington University in St. Louis, and for the final six years of his life he was a distinguished scholar at the Levy Institute at Bard College. “Many of Minsky’s colleagues regarded his ‘financial-instability hypothesis,’ which he first developed in the 1960s, as radical, if not crackpot,” wrote John Cassidy in the New Yorker in 2008, but “with the subprime crisis seemingly on the verge of metamorphosing into a recession, references to [the hypothesis] have become commonplace on financial Web sites and in the reports of Wall Street analysts.” “As a boom leads to euphoria, Minsky said, banks and other commercial lenders extend credit to ever more dubious borrowers, often creating new financial instruments to do the job. During the 1980s, junk bonds played that role. More recently, it was the securitization of mortgages.” —John Cassidy