Econ 508: Controversial Issues in Recent Economic Literature: The Contributions of Hyman P. Minsky

 

Professor Wray Winter 2007

Class Meets: Wed 4-6:45pm, FH 338

Office Hours: M,W 10-11:30am, W 2-3pm Or by Appointment

Office: Manheim 202c, 235-5687 (don’t leave message)

Best way to reach Wray: wrayr@umkc.edu

TA: Yeva Nersisyan, ysnz72@umkc.edu

 

Description: This course will examine the contributions made by Hyman Minsky, beginning with his early work on investment and business cycles. We next examine Minsky’s research on employment and poverty, his critique of President Johnson’s War on Poverty, and Minsky’s employer of last resort proposal. We then explore Minsky’s better-known reinterpretation of Keynes’s General Theory, Minsky’s development and extension of the financial instability hypothesis, and his policy proposals in Stabilizing an Unstable Economy. Finally, we conclude with an assessment of his work at the Levy Economics Institute.

 

Readings: The readings will consist of a number of journal articles (mostly available through J-Stor), published and unpublished work from his archives at the Levy Institute, Levy Working Papers, and his two major books, John Maynard Keynes and Stabilizing an Unstable Economy. There will also be limited reading of some of the secondary literature.

 

Evaluation: Several shorter essays that will be presented in class (40%), participation (5%), community service (5%), and a term paper on an approved topic (50%). Late work is devalued by 10%.

 

Outline (timing is approximate; partial list of readings):

 

  1. Ceilings and Floors (Weeks 1-2)

a)

Monetary Systems and Accelerator Models, Hyman P. Minsky
The American Economic Review > Vol. 47, No. 6 (Dec., 1957), pp. 859-883

 

b)

A Linear Model of Cyclical Growth, Hyman P. Minsky
The Review of Economics and Statistics > Vol. 41, No. 2, Part 1 (May, 1959), pp. 133-145

 

c)

Central Banking and Money Market Changes, Hyman P. Minsky
The Quarterly Journal of Economics > Vol. 71, No. 2 (May, 1957), pp. 171-187

 

d)

Longer Waves in Financial Relations: Financial Factors in the More Severe Depressions Hyman P. Minsky, The American Economic Review > Vol. 54, No. 3, Papers and Proceedings of the Seventy-sixth Annual Meeting of the American Economic Association (May, 1964), pp. 324-335

 

 

e) Working Paper No. 64 | November 1991, Levy Institute (www.levy.org) Market Processes and Thwarting Systems, Minsky and Ferri

       

 

 

  1. Poverty and Unemployment (Weeks 3-5)

 

a)

Review: Employment, Growth and Price Levels: A Review Article
Author(s) of Review: Hyman P. Minsky
Reviewed Work(s): Staff Report on Employment, Growth and Price Levels by Joint Economic Committee; Otto Eckstein, Study Papers 1-23
The Review of Economics and Statistics > Vol. 43, No. 1 (Feb., 1961), pp. 1-12

b) Minsky, H. P. Undated. Draft manuscript on Poverty and Policy.

c) ———. 1965. “The Role of Employment Policy.” In Margaret S. Gordon, ed. Poverty in America. San Francisco: Chandler Publishing Company.

d) ———. 1968. “Effects of Shifts of Aggregate Demand upon Income Distribution.” American Journal of Agricultural Economics 50: 2:328–339.

e) ———. 1973. “The Strategy of Economic Policy and Income Distribution.” The Annals of the American Academy of Political andSocial Science 409 (September): 92–101.

f) ———. 1975. “The Poverty of Economic Policy.” Unpublished paper,

presented at the Graduate Institute of Cooperative Leadership, July 14.

g) Public Policy Brief No. 78, 2004 | June 2004, Levy Institute (www.levy.org), The War on Poverty after 40 Years: A Minskyan Assessment, by Bell and Wray

 

  1. The Reinterpretation of John Maynard Keynes (Weeks 6-8)

 

a)      Minsky, 1975: John Maynard Keynes: Columbia University Press

b)

The Legacy of Keynes Hyman P. Minsky
The Journal of Economic Education > Vol. 16, No. 1 (Winter, 1985), pp. 5-15

 

c)

Review: [untitled], Author(s) of Review: Hyman P. Minsky
Reviewed Work(s): Keynes' Monetary Thought: A Study of Its Development. by Don Patinkin, The Journal of Economic History > Vol. 37, No. 2 (Jun., 1977), pp. 546-548

d)

Review: [untitled], Author(s) of Review: Sidney Weintraub
Reviewed Work(s): John Maynard Keynes. by Hyman P. Minsky
Keynes. by Donald E. Moggridge
Journal of Economic Literature > Vol. 15, No. 1 (Mar., 1977), pp. 92-95

e)

Comments on Friedman's and Schwartz' Money and the Business Cycles
Hyman P. Minsky; Arthur M. Okun; Clark Warburton
The Review of Economics and Statistics > Vol. 45, No. 1, Part 2, Supplement (Feb., 1963), pp. 64-78

f)

Review: [untitled], Author(s) of Review: G. C. Harcourt
Reviewed Work(s): John Maynard Keynes. by Hyman P. Minsky
Economica > New Series, Vol. 44, No. 175 (Aug., 1977), pp. 306-307

 

 

  1. The Financial Instability Hypothesis (Weeks 9-10)

 

a) “The financial instability hypothesis: a restatement”, in Arestis and Skouras, Post Keynesian Economic Theory, 1985

 

b) Working Paper No. 74 | May 1992, Levy Institute (www.levy.org), The Financial Instability Hypothesis, Hyman Minsky

c) Working Paper No. 93 | May 1993, Levy Institute (www.levy.org), Finance and Stability: The Limits of Capitalism, Hyman Minsky

 

d)

Review: [untitled]
Author(s) of Review: Hyman P. Minsky
Reviewed Work(s): Essays on Economic Stability and Growth. by Nicholas Kaldor
Journal of Economic Literature > Vol. 19, No. 4 (Dec., 1981), pp. 1574-1577

e)

Review: [untitled]
Author(s) of Review: Hyman P. Minsky
Reviewed Work(s): Casino Capitalism. by Susan Strange
Journal of Economic Literature > Vol. 25, No. 4 (Dec., 1987), pp. 1883-1885

 

 

f) Working Paper No. 275 | July 1999, Levy Institute (www.levy.org), Minsky's Analysis of Financial Capitalism, Papadimitriou and Wray

       

 

  1. Stabilizing the Unstable Economy (Weeks 11-14)

 

a) Minsky, H.P. 1986. Stabilizing an Unstable Economy, New Haven, Conn.: Yale University Press.

b) Working Paper No. 155 | April 1996, Levy Institute (www.levy.org), Uncertainty and the Institutional Structure of Capitalist Economies, Hyman Minsky

c) Working Paper No. 217 | December 1997, Levy Institute (www.levy.org), The Economic Contributions of Hyman Minsky: Varieties of Capitalism and Institutional Reform, Papadimitriou and Wray

d) Working Paper No. 165 | May 1996, Levy Institute (www.levy.org), Economic Insecurity and the Institutional Prerequisites for Successful Capitalism, Minsky and Whalen

e) Working Paper No. 69 | January 1992, Levy Institute (www.levy.org), Reconstituting the United States's Financial Structure: Some Fundamental Issues, Hyman Minsky

f) Public Policy Brief No. 3, 1993 | January 1993, Levy Institute (www.levy.org), Community Development Banking: A Proposal to Establish a Nationwide System of Community, Minsky, Phillips, Papadimitriou, and Wray

g)

Review: [untitled]
Author(s) of Review: James Tobin
Reviewed Work(s): Stabilizing an Unstable Economy. by Hyman P. Minsky
Journal of Economic Literature > Vol. 27, No. 1 (Mar., 1989), pp. 105-108

 

  1. Term Paper Due: May 4 at 5pm.