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Finance, Investment and Economic Fluctuations

An Analysis in the Tradition of Hyman P. Minsky
Eric Nasica, Lecturer in Economics, University of Nice–Sophia Antipolis, France
Recent outbreaks of financial instability have spurred new interest in the works of the late Hyman P. Minsky who made path-breaking contributions to our understanding of contemporary market economies. This book provides an innovative tribute to Minsky’s work and sheds new light on the nature of economic fluctuations and financial instability.
Extent: 240 pp
Hardback Price: £87.00 Online: £78.30
Publication Date: 2000
ISBN: 978 1 85898 896 2
Availability: In Stock
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  • Economics and Finance
  • Financial Economics and Regulation
  • Post-Keynesian Economics
Recent outbreaks of financial instability have spurred new interest in the works of the late Hyman P. Minsky who made path-breaking contributions to our understanding of contemporary market economies. This book provides an innovative tribute to Minsky’s work and sheds new light on the nature of economic fluctuations and financial instability.

Eric Nasica provides a contemporary analysis of the relationship between finance, investment and fluctuations. He focuses on the contributions of Hyman P. Minsky and, in particular, on his financial instability hypothesis. He also examines more recent models of financial instability, based on dynamic non-linear systems and asymmetric information, but finds that they are unable to account adequately for the behaviours of agents in situations of uncertainty and for the role of institutions in the unfolding of fluctuations. Minsky’s theory of fluctuations accounts for these factors in the role of ‘institutional dynamics’. Finally, the author compares fluctuations and finds that they have a similar approach to uncertainty and macroeconomic instability.

Finance, Investment and Economic Fluctuations will prove invaluable to scholars of macroeconomics and finance.
‘. . . brilliant volume. . . The book is well written and is worth reading because it presents an author whose ideas can illuminate the present evolution of the “new economy”.’
– Piero Ferri, The Economic Journal

‘There have been a number of events honouring Hyman Minsky since his death in 1996. However, none of the contributions to these events has presented as serious and honest an evaluation of Minsky’s work as this book. It is a real tribute, for it not only looks backwards in assessment, it looks forwards to new developments, developments that Minsky himself considered promising. Nasica’s exposition has managed to grasp both the ambiguous and eclectic nature of Minsky’s financial fragility hypothesis, noting the originality of what Nasica calls the financial theory of investment.’
– From the preface by Jan Kregel, University of Bologna, Italy
Contents: Introduction Part I: Minsky’s Endogenous and Financial Cycles 1. The Post-Keynesian Legacy 2. The Financial Theory of Investment 3. The ‘Incoherence’ of Market Economies Part II: Modelling the Financial Instability Hypothesis 4. Linear and Non-Linear Models 5. New-Keynesian Models Part III: Rationality, Institutions and Financial Instability 6. Modelling Minsky’s Theory with New-Keynesian Concepts 7. Institutional Dynamics Conclusion References Index