Money and finance: the heterodox views of R. Clower, A. Leijonhufvud and H. Minsky

Abstract

The heterodoxy of Robert Clower, Axel Leijonhufvud and Hyman Minsky consisted in dispensing with the dominant assumption according to which the system spontaneously tends to a situation of full coordination. In analysing the effective disequilibrium behaviour of the system, all three came to the conclusion that monetary and financial forces have a crucial importance for coordination and that their role can be highly destabilising. Contrary to the dominant theory, all three offer useful insights to understand what is happening today.