Hyman Minsky and the Frisco Fed

The Mostly Economics Blog points to a speech by Janet Yellen from the Federal Reserve on Hyman Minsky and the "Minsky Moment", ongoing at present. Given that folks at the Frisco Fed are reading Minsky now, maybe this would be a good time to take Liam's sugggestion on this for the next book club? One month from now, perhaps?

Central to Minsky’s view of how financial meltdowns occur, of course, are “asset price bubbles.” This evening I will revisit the ongoing debate over whether central banks should act to counter such bubbles and discuss “lessons learned.” This issue seems especially compelling now that it’s evident that episodes of exuberance, like the ones that led to our bond and house price bubbles, can be time bombs that cause catastrophic damage to the economy when they explode. Indeed, in view of the financial mess we’re living through, I found it fascinating to read Minsky again and reexamine my own views about central bank responses to speculative financial booms. My thoughts on this have changed somewhat, as I will explain.