Author of the "financial instability hypothesis," prophet of crisis
An American economist of the post-Keynesian school, long ignored by the mainstream in his lifetime, who rose to fame after the 2008 financial crisis. He put forward the famous "financial instability hypothesis": stability itself breeds instability. When the economy is long prosperous and calm, people gradually forget risk, borrow more and more, grow ever more aggressive, turning sound investment into speculation and then into a Ponzi-like game of pass-the-parcel, until at some moment it suddenly collapses — a moment later called the "Minsky moment." The 2008 global financial storm bore out his decades-old theory almost perfectly, making this forgotten economist an overnight authority.
Minsky’s core insight is an almost philosophical line: "stability leads to instability." The longer the peace and prosperity, the more people let down their guard and pile on leverage, quietly pushing the whole system toward fragility, until at some tipping point the bubble bursts and the chain of debt snaps — the "Minsky moment." After the 2008 crisis, the term became a byword on Wall Street and at central banks, and an economist lonely in life was canonized.
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