Financial Crisis and Policy Proposals in the Context of the Financial Instability Hypothesis of Hyman Minsky

The last financial crisis, which started in the US and caused a chain reaction around the world, demonstrated one more time that the mainstream economic s spolicy proposals have not been able to solve the problems of the capitalist system. Hence, many economists and policymakers have attempted to define today s financial capitalism and to improve new policy proposals in line with the new financial era. The workings of Hyman Minsky and many Post Keynesian economists are among those which try to look at the capitalist system in a broader perpective and to offer suggestions to solve systemic problems. In this article, it will be investigated how financial relationships and financial fragility are analyzed and identified and what policy proposals are offered in the Post Keynesian economics and Minsky’s workings. For this, firstly, the theoretical bases of the school of Post Keynesian Economics will be given. Secondly, the financial instability hypothesis and the causes of the financial fragility will be explained from the points of view of Hyman Minsky. Finally, Minskyan policy proposals will be presented.