Re: Minsky, FIH, and stability

[lwray@xxxxxxxxxxxxxxxxx (Randy Wray)]

Paul Davidson commented that if one accepts Minsky's FIH (or the view
that capitalist economies are fundamentally unstable), then one must
either advocate free markets or overthrow capitalism. I am sure Paul
just means to be provocative.
According to Minsky, the endogenous instability of capitalism is
constrained by the floors and ceilings provided by
institutions--Paul's TIP, or countercyclical government deficits are
examples of floors and ceilings that help to constrain instability.
There is no reason to give up the ghost, yet.
Furthermore, I am not sure what Paul means when he says that those who
believe capitalism is endogenously unstable should replace it with a
system that is stable. Why is there any reason to believe that there
could ever be a system that could be put in place and then be left to
its own internal logic to generate a continuously stable economy?
Randy Wray