Financial Instability - Minsky
hello can you answer the following questions
MONEY AND FINANCIAL STABILITY PAPERS
-“The financial instability hypothesis”, Minsky
1- What is the economic problem?
3- What are the three types of financial structures?
4- Big government may be good but also bad, why?
5- What are the two theorems of the financial instability hypothesis?
6- Does the FIH rely on external shock to generate instability?
-“On the non-neutrality of money” Minsky
1- Each theory uses special concepts to derive a conclusion regarding the neutrality or non-neutrality of money. In Minsky theory, what are the concepts that replace: rational expectation? Asymmetry of information? Aggregation of individual agents? Independence of real and monetary variables?
2- What is the main consequence of 1- regarding the neutrality of money: can money ever be neutral? Explain.
3- What are the three types of financial structures used to measure financial fragility?
4- Can banks be in a hedge finance position? Explain.
5- What is the meaning of ‘robustness’?
6- Why is the capitalist economic system inherently unstable?
7- Why does a free market economy require a big government?
By OTA: Umut Oltulu, MBA
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