Minsky's big argument (which unfortunately gets overshadowed by the less interesting financial instability hypothesis) is that prices of long lived capital goods are fundamentally determined by financial/liquidity conditions in a way that prices of current output aren't.
This is one reason why money is never neutral, not even in the long run - more abundant money/credit doesn't just lead to higher spending, but spending on different things - specifically, more long-lived and illiquid ones.
It's also a reason why you can't think about inflation simply in terms of a rise in "the" price index. Real inflationary processes always raise some particular prices relative to others.
All of which is very relevant today. I think the best statement of Minsky's two-price story - which
@M_C_Klein could have dropped right into this piece - is in chapters 4 to 6 of his book John Maynard Keynes.
@M_C_Klein could have dropped right into this piece - is in chapters 4 to 6 of his book John Maynard Keynes.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
