American economist, professor for most of his career at Washington University in St. Louis, and a figure whose work was regarded by the mainstream profession as obscure and dated throughout his lifetime — and who, within a decade of his death, came to look like the clearest-eyed analyst of capitalist financial dynamics any 20th-century American economist had produced. "This is a Minsky moment" became, after 2008, the phrase reached for by journalists, central bankers, and finance writers trying to describe what had happened; the economist it named had been out of fashion for his entire career.
Minsky's project was to recover what he regarded as Keynes's most important insight — that capitalist economies with developed financial systems are inherently unstable, and that this instability is generated endogenously by the normal operation of those systems rather than imposed from outside by shocks. The argument is summarized in his financial instability hypothesis: in the wake of a crisis, financial relations are conservative (borrowers and lenders stick to hedge finance, in which expected income covers both principal and interest); as memory of the crisis fades and stable growth continues, the system migrates toward speculative finance (income covers interest but principal must be rolled over) and eventually Ponzi finance (income covers neither; the position is sustained only by capital gains or further borrowing). The transition happens not because anyone is irrational but because the rational response to stability is to take on more risk. Stability, in Minsky's formulation, is destabilizing.
Stabilizing an Unstable Economy (1986) and John Maynard Keynes (1975) are his two major books, and for most of his life they were largely unread outside a small circle of post-Keynesian economists (Joan Robinson's tradition) and the occasional practitioner. The 2008 financial crisis — an almost textbook case of the transition from hedge through speculative to Ponzi finance in the American housing market — brought Minsky belated recognition. His institutional recommendations (Big Government as automatic stabilizer; Big Bank as lender of last resort; structural reforms that would contain the Ponzi phase before it consumed the system) have become reference points for contemporary financial-regulation debates. Minsky was the Keynesian the Keynesians had forgotten.