The object of this work is to evaluate the monetary policy issues that arose during the financial crisis of 2007-8 according to minsky's thought. It is argued that minsky's idea of structural instability may fit the policy problems linked to the crisis. In particular, minsky's contribution to the theory of central banking is used to evaluate the conduct of the Federal reserve during the crisis. minsky's reading of the roles of the central bank in the presence of sophisticated markets and securitization is helpful in understanding both the failure of the Federal reserve in preventing the crisis and the relative success in mitigating the effects. This apparent success notwithstanding, the paper warns that economic policy, to promote stability, must enlarge the stability field of the system by changing the type of institutions operating there and their business habits.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.