How Minsky became a Post-Keynesian economist?
This paper addresses the transformation, in the 1970’s and the 1980’s, of Hyman Minsky’s research programme on the Financial Instability Hypothesis (Minsky 1975; 1986). We show how Minsky’s intellectual endeavour was influenced by the emergence of the post-Keynesian community in the US. Parallelly, we show the feedback effect of Minsky’s contribution and role in the building of the post-Keynesian community. Although our account isn’t exhaustive, it provides some elements for a further analysis of the origin of some modern approaches (Stock-Flow Consistent model, Agent-Based model, Modern Monetary Theory, and Post-Keynesian Institutionnalism). Our contribution relies on the literature recounting the construction of the post-Keynesian community in the 1970s (King, 2002; Mata, 2005; Lee, 2009) and at highlighting some of its intellectual specificity. More precisely, we analyse what makes post-Keynesians a community, as opposed to a collection of isolated ‘heterodox’ economists (Forget and Goodwin, 2011). First, we build on the idea that the Cambridge Anglo-Italian tradition provided a common reference or cornerstone to various Keynesian research programs. The case of Minsky illustrates this phenomenon, since Minsky’s Financial Instability Theory, although originating in the US American tradition, was nevertheless reshaped by Minsky in the 1970s to include and refer to Cambridge ideas. Second, we rely on the existing analysis on the role of the Journal of Post Keynesian Economics (established in 1978). The journal fostered the development of analytical debates across the arising post-Keynesian community. Such debates produced notably some conceptual clarifications, for instance about the endogeneity of money. We show that Minsky was at the center of those debates, also because of some Neoclassical roots of his theory. To respond to the criticisms, Minsky developed his own interpretation of Kalecki’s law of profit. This interpretation later provided one of the cornerstones of Modern Monetary Theory (Kelton, 1998). Bibliography : Forget, Evelyn L. and Craufurd D. Goodwin. 2011 « Intellectual Communities in the History of Economics ». History of Political Economy. 43(1). 1–23. Kelton, Stephanie A. 1998. The Hierarchy of Money. Levy Institute working paper n°231. King, John E. 2002. A History of Post Keynesian Economics Since 1936, Edward Elgar Publishing : UK. Lee, Frederic S., 2009 History of Heterodox Economics: Challenging the mainstream in the twentieth century, Routledge. Mata, Tiago. 2005. « Dissent In Economics : Making Radical Political Economics and Post Keynesian Economics, 1960-1980 » Ph.D dissertation, London School of Economics Minsky, Hyman P. 1975. John Maynard Keynes, London : Palgrave Macmillan. Minsky, Hyman P. [1986] 2008. Stabilizing an Unstable Economy. New-York: MacGraw-Hill.
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Keywords: Post-Keynesian, history of economic thought, macroeconomics
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