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When Hyman Minsky's book originally was published more than two decades ago, it was ahead of its time. This is often the case with economic thinkers. Joseph Schumpeter enjoys greater influence today than he did in his own time, and'the seminal ideas ofJohn Maynard Keynes gained broad influence well after they were published. So too with the indefatigable Minsky. Although he was a force to be reckoned with during the 1970s and 1980s, his ideas never have been more salient than today. If Minsky were alive today, he could justly claim "I told you so" to those who have paid close attention to economics and finance in the last few decades. There is no better moment to reissue this Minsky classic.Like Keynes (about whom Minsky published a biography in 1975) and Schumpeter, Minsky was centrally concerned with business cycles. The Keynesianism that became dominant following World War II focused chiefly on the politically popular aspects of Keynes' writings. Too few recalled that Keynes recommended monetary action before fiscal activism and budget surpluses during periods of growth. For too many policymakers, Keynesianism meant deficit spending as an all-too-easy and automatic fix. There was a growing sense that Keynesianism had conquered the business cycle, as reflected in terminology like "soft landing" and "mid-course correction."Hyman Minsky forged a different and important connection with Keynes. He emphasized the volatility of investments, pointing out that the underlying uncertainty of the cash flow from investments has powerful repercussions on the balance sheets of business. It was an important insight that deserved much greater attention.After monetarism eclipsed Keynesianism in the late 1970s and 1980s, Minsky's insights again were not given their due. Even at its zenith in the early 1980s, monetarism failed to cope effectively with the changing structure of the financial system, which Minsky so eloquently dealt with in his broad analytical approach. Meanwhile, econometrics had become almost a vii viii FOREWORD x PREFACE AND ACKNOWLEDGMENTS TO THE FIRST EDITION policy ignored the critical variables that make it possible to "stabilize" our inherently unstable system. Policy, while broadly successful, has not addressed the deteriorating performance of the economy. Thus an agenda for reform follows the historical, theoretical, and institutional material.Stabilizing an Unstable Economy is in the post-Keynesian tradition, which I take to mean that Keynes provides us with the shoulders of a giant upon which we can stand in order to see far and deep into the essential character of advanced capitalist economies. However, being post-Keynesian does not mean being slavishly dependent on the works of the "Great Man." I hope I do not make points by citing Keynes; if I do, I apologize now.My intellectual debts are many: from my education lowe a great debt to Oscar Lange, Henry Simons, and Josef Schumpeter. From recent years lowe a great deal to my colleagues in Trieste-the faculty and students at the Centro di Studi Economic...