Hyman Minsky[’s] … emphasis on the fragility of the monetary system and its propensity to disaster … a lineal descendant of a model, set out … by a host of classical economists including John Stuart Mill, Alfred Marshall, Knut Wicksell, and Irving Fisher…. [E]vents leading up to a crisis start with a “displacement, ” some exogenous, outside shock…. Displacement brings opportunities for profit… investment and production pick up. A boom is under way… fed by an expansion of bank credit … the formation of new banks, the development of new credit instruments, and the expansion of personal credit outside of banks…. [T]he urge to speculate is … transmuted into effective demand for goods or financial assets…. Prices increase, giving rise to new profit opportunities and attracting still further firms and investors. Positive feedback … “euphoria. ” Speculation for pric
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