Financial Stability News

News about financial stability, central banking and theory of money

Fisher and Minsky on debt deflation

The 1933 Econometrica article by Fisher on debt deflation is a classic. If you haven’t read it already, read it now. But you might then also read Hyman Minsky’s take on the same story (from 1982). Here he goes through Fishers article point by point and then presents his own version of the debt deflation theory, often called the Financial Fragility Hypothesis. For a fuller version, read his 1986 book Stabilizing an unstable economy


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