Re: Minskyan Hypothesis - how to consider

["Ronald Calitri" <calitrir@xxxxxxxxxxxxx>]

Science. The following is only an outline.

>Wendy Moreno wrote:

>I think someone over there said that Minsky's ideas are not at all correct.
>I just can't remember who was.


Yes, it was I, Ron Calitri. But let's give Minsky a chance - like any great
economist, almost all of his ideas were correct. Before criticising him,
your question begs our mutual technological sophistication, since the full
record of his papers cannot be obtained by either of us except by arduous
physical search. There is a great need for many someones to make collected
works available in pdf format.............???.....[well I could hold down
those keys all day and it wouldn't change this bad situation.]....

>but  From my own point of view, Hyman Minsky put some ideas that if not in
>an original way, they were very well explained.


>From my (guess) point of view, Minsky (personally) was forced into a corner
when the neo-keynesian pac-men ate the social liberals. The course of his
thinking will have to be explained by someone more expert. Anyway, around
1960 he latched onto the mechanics of the predator-prey model and attached
to it the social reality of bankers v. borrowers. He was right, and the
proof is evident in the natural human behavior of overly-friendly (foxy?)
bankers who eat all the (chickens?) borrowers, and die, and in his
subsequent publications. That behavioral cycle is excitingly repeated
throughout history, but each time with vast differences that also require
explanation. That is where the problems arise.

>
>Capitalism as an economical system works in a cyclical way.
>And I consider Minsky could express only one of the main factors which
>explain the origin of the economical and financial instability (because a
>financial desequilibrium is reflected in an economical one, or not?).

Two points:

    A cyclical process as that is usually defined is not visible in the
data. It is not really a capitalist "system," more a "process," or
addressable as a mixture of temporal processes. Some appear cyclical but
they are usually complex. The paths of most component series are
time-irreversible. Sorry to be mean. We have one foot in the pk-minsk, but
the other must tread onto the conflicted plane of the NBER "business cycle"
stylists, whose client policy wonks now insist on a mild depression so as to
accomplish "mean reversion." What they mean by mean is the steady growth
path implied by the cyclical processes they work with, nairu, and a host of
unhealthy dips below the mean require to be accomodated in order to keep on
track. As far as I have investigated it the original approach does not seem
to make
sense - but NBER has plonked a lot of money into extensions. The same may be
said  about mathematics as pistols and their maths also use cycles.

    Second, here is an "Equity Premium Puzzle" for post-Keynesians: why
financial turmoil does not have more considerable real-side effects? In the
simplistic predator prey model the impulse for predator population-collapse
comes from erosion of the prey. One important reason is that
companies can go through multiple ownerships without any change being
visible for either the workers or their customers.

>
>Debt finance is the fuel of the economy. Do you think there are other fuels
>in the economy (not regarding the  creation of money).

Why not? Don't you ever do anything not for money?

> Something else: We
>are living the most recent crises of Asia, countries that were mainly
>identified for their high rates of saving now are in economical distress.
>We have to be clear and to understand that saving by itself is not able to
>stabilize an economy, but that the microeconomic policy regarding human
>capital and productive apparatus which reduces costs of production is what
>should be pointed out.

Exactly the salving grace of the analogous Minskyian system - All the
rabbits get skinny and the lynx has to catch more of them, but not that many
more. But the biological models are complex, and gruesome. For example -
take a system of hungry lynx, hungry rabbits. If the lynx decide to move on,
they go into a feeding frenzy, I do not know if the Canadian Lynx does this,
but Minskyian expressionists consider such behavior a measurable component
of financial activity.

> The Institutional System is which determines the
>direction of the flow of funds, developing thus areas that receive more
>resources and destroying others leaving them without enough resources to
>grow up.


That is where the model is difficult to carry forward. Perhaps, you will
pardon yet another analogy, Think of our solar system, more or less stable,
each planetary system in its own Minskian cycle - now imagine a bucket of
solar systems without a sun, or a multiple solar-planetary system being
approached by another sun. The dynamic complexities are inexpressible.

At least for now by,
Ronald Calitri
>
>Wendy Moreno
>