Minsky and the instability of capitalism is back, HT Calculated Risk. When we strip away the value terms, Minsky's thesis is another form of the Malthusian growth and decay process. Yes, we are unstable and can never really attain equilibrium. Referring to our simple multi-stage queuing model, we say the economy starts with N-1 stages of production; and inflates to N stages of production. We are euphoric on inflation, and a bit panicked on deflation.
Again the issue is obtaining the same measurement uncertainty for all agents. Whether poor or rich, we seek the same, constant uncertainty in life. And that leads to quantum states we can call the rank of the economy. I can go through the postulates: constant uncertainty built in, minimize transactions, keep the variance/mean (signal to noise ratio) of the queue sizes equal.
We never quite get there, build up surpluses in one instance which causes an inflation. In the inflated state volatility builds and we return to the deflated state.
1 comment:
Whoa, this is stunning. Picture each of the looking at and composing you could do... Chilly in the winter though.
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