January 20, 2016
Why Minsky Matters: An Introduction to the Work of a Maverick Economist (a Review)
By William J. Bernstein
CFA Institute, January 20, 2016. All Rights Reserved.
A few decades ago, Paul Samuelson wrote a letter to Robert Shiller and John Campbell in which he discussed the notion that while the stock market was “micro efficient,” it was also “macro inefficient,” by which he meant that although profitable security choices were swiftly arbitraged away, the stock market as a whole irrationally swung between extremes of valuation.
Hyman Minsky would have made a similar point about the economy: While it is highly efficient, it is also unstable….
Read more: http://www.cfapubs.org/doi/full/10.2469/br.v11.n1.2