← Back to Academy

The Minsky Moment: How Stability Itself Breeds Instability

Financial History and Market Crises • Beginner Investing • 7 min

Economist Hyman Minsky's Financial Instability Hypothesis makes a genuinely counterintuitive claim: periods of prolonged economic stability don't just precede instability by coincidence — they actively help CAUSE it, by encouraging progressively riskier borrowing and lending behavior the longer that stability persists. As confidence builds during a stable expansion, borrowers and lenders alike gradually take on more…

2 of 2 free lessons used

Create a free account to keep reading

You have read your 2 free lessons. Making an account is free and gives you 2 more straight away — plus your progress, streak and quiz scores saved as you go.

Learning through your school? Join your class — school students get everything, at no personal cost.