Hyman Minsky's Theory of Capitalist Development
The Jerome Levy Economics Institute Working Paper No. 277
11 Pages Posted: 15 Dec 1999
Date Written: August 1999
During the last decade of his life, Hyman Minsky drew on insights acquired from Joseph Schumpeter in an effort to explore the long-term development of capitalism. He believed such an exploration would underscore the economic implications of postwar financial-system innovations and could encourage a broad discussion regarding the appropriate structure of the U.S. economy. This paper focuses on the theory of capitalist development that Minsky produced during that decade.
After describing the purposes of Minsky's exploration, his theory is outlined both in terms of its essential elements and as it applies to the U.S. economy. In addition to emphasizing the relations between finance and business, Minsky identified a transition through at least five distinct stages of capitalism: from the merchant-capitalist era to a recent period dominated by money managers. A concluding section identifies a number of research directions suggested by Minsky's analysis.
JEL Classification: N10
Suggested Citation: Suggested Citation