Hyman Minsky’s financial instability hypothesis and the Greek debt crisis
This article attempts to analyze the current debt crisis in Greece based on the financial instability hypothesis developed by H. Minsky. This article shows that the hypothesis provides an understanding of how an economy endogenously becomes “financially fragile” and thus prone to crises. The authors analyze how public and private sector behavior in the Greek economy led to the country’s debt crisis. In particular, based on a sample of 36 Greek companies, the authors show that between 2001 and 2014, majority of those companies had switched to fragile financial structures. Special attention is devoted to the negative consequences of applying the neoclassical doctrine of “austerity measures” in Greece as the principal “anti-crisis” concept of mainstream economic science.
This paper considers the basic aspects of the financial instability hypothesis developed by Hyman Minsky. This conception has become very pertinent due to the events concerned with the Great Recession. The author shows both links between Keynes’s theory and Minsky approach and Post Keynesian “spirit” of the described hypothesis. The special role of uncertainty and money has been emphasized. The paper shows that the hypothesis provides an understanding of how the contemporary market capitalist economy endogenously becomes “financially fragile” and thus prone to crises. The author demonstrates that the Great Recession can be treated as a consequence of the processes described by the financial instability hypothesis.
Research has shown that the mainstream media coverage of the EU’s economic crisis has been not only offensive and prejudiced for the people of the countries most affected by it, but most crucially, utterly relying on elite understandings of the crisis, as articulated by the political and economic establishment of the EU. Indeed, the hegemonic public framing of the Eurozone crisis followed an ‘Orientalist’ approach, through spectacular narratives stressing cultural and moral failures of ‘national characters’ and exceptional national institutions that are (supposedly) fundamentally different from the ‘European’ cannon. This way, regimes of exception were able to be publicly constructed as plausible explanations for the crisis (as a ‘self-inflicted’ problem by those not following the European norm), and equivalent exceptional policies (such as austerity regimes) to be implemented in the supposedly problematic countries. Drawing on the findings of previous research, this contribution presents the class and racist dimensions of the German mainstream media’s ‘Greek-crisis’ representations, by focusing on the ‘crisis epicenter’, Greece, a country relentlessly targeted and, slandered and shamed by the German media and the German elites in particular. The chapter concludes that both in their light and in their serious versions, the German media publicly construct the so-called Greek crisis in line with the bourgeois and post-democratic principles directing the EU.
This study examines the ways that the economic crisis in Cyprus is covered by mainstream Greek media from different (left and liberal) political affiliations. Cyprus is a country with strong historical, geographic, social, cultural, economic and political ties to Greece. Main events concerning Cyprus are followed by the Greek politicians, media and citizens with great interest. Further, Greece’s own crisis triggers an additional interest in the Cypriot crisis, as both countries agreed to ‘bailout’ agreements with the ‘troika’ (an institution composed by the European Central Bank, the International Monetary Fund and the European Commission), in exchange of severe austerity reforms, and thus, Cyprus can serve as an example to follow or to avoid, of any attempted policy of economic recovery.
This chapter focuses on discursive constructions of creativity in the Greek public sphere in connection to the Greek government debt crisis. Instrumentalized by policy makers and pundits pursuing neoliberal reforms in Greece, creativity is understood to serve a mode of biopolitical governmentality. This is connected to the production of a national consensus over the necessity for neoliberal reforms and to the individualization of the risks and insecurity that such reforms entail. This chapter looks at specific public discursive constructions of creativity in Greece from 2010 onward. Specifically, the creativity discourse is approached in both its progressive and conservative articulations as articulated by the social democrat Giorgos A. Papandreou, Greece’s prime minister during the first years of the crisis (2009–2011), and the conservative Kyriakos K. Mitsotakis, Greece’s prime minister in 2019 and at the time of writing. Simultaneously, this chapter foregrounds the examples of success stories of creative ventures that received publicity in Greece so as to unfold other examples of a hegemonic discourse meant to motivate society on a post-political, entrepreneurial, and nationalistic basis. Such success stories develop through the didactic narratives that proliferate in Greece’s mainstream news and lifestyle media, which are meant to establish a creative paradigm as a way out of unemployment and recession. Here, creativity forms a public repertoire that fabricates the crisis into a so-called opportunity for development that is borne through entrepreneurship.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.