Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

Predicting the Global Financial Crisis: Hyman Minsky's intellectual legacy at the Levy Institute

His Florent, Paris 1 Panthéon Sorbonne

This paper discusses the notion of intellectual legacy by looking at the use of Minsky's intellectual legacy within the Levy Economics Institute of Bard College. Minsky's work was hailed after the 2008 crisis, as Minsky warned that another great financial crisis could occur. Minsky ended his career at the Levy Institute, a think tank. This institute is at the origin of the republishing of many of Minsky's works (Minsky, [1954]2003; [1975]2008a; [1986]2008b). At the same time, researchers close to Minsky have developed the Modern Monetary Theory. This theory and the economic policy recommendations of its followers have been the subject of many recent discussions (for example Mankiw, 2019). In addition, the Levy Institute macro-modeling team was one of the few groups of economists that predicted the 2007-2008 financial crisis (reference). We show that Minsky was widely cited in those works. His legacy has been used by some researchers (notably Larry Randall Wray) as a framework for integrating the various works produced at the Institute, which do not all share the same methodological or theoretical foundations. For example, Minsky’s concept of Money Manager Capitalism was used to link the works of the Levy Institute macro-modeling team about the US economy to a more global perspective. Our contribution relies on the history of intellectual legacy by raising the question of the meaning of an intellectual legacy. In fact, an intellectual legacy is never perfectly clear. The receivers of the legacy need to interpret it, and different types of conformity between the works of the inspirer and that of the receivers exist (Allisson and Missemer, 2015). Moreover, the content of the legacy is influenced by the receivers' positions, since they can select which of Minsky's texts are emphasized and take advantage of ambiguities of its works. Bibliography: Allisson, François and Antoine Missemer. 2020. Some Historiographical Tools for the Study of Intellectual Legacies. Studies in History and Philosophy of Science Part A, 84: 132-141. Mankiw, Nicholas Gregory. 2020. "A Skeptic's Guide to Modern Monetary Theory." AEA Papers and Proceedings, 110: 141-44. Minsky, Hyman P. and Dimitri B. Papadimitriou (ed). [1954]2003. Induced Investment and Business Cycles. Cheltenham: Edward Elgar Publishing. Minsky, Hyman P. [1975]2008a. John Maynard Keynes. New York: McGraw-Hill. Minsky, Hyman P. [1986]2008b. Stabilizing an Unstable Economy. New York: McGraw-Hill.

Area: Eshet Conference

Keywords: Minsky; Financial Crisis; Modern Monetary Theory

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