ABSTRACT
H. Minsky's contribution to Post-Keynesian views of the relationship existing between an endogenous credit supply and the gestation of financial crises deserves special attention. Minsky's financial fragility hypothesis is largely based on the psychological misperception of the fundamental forces at play behind any expansion of accumulation. Aberrant psychology in Minsky's view gives rise to irrational exuberance and is the culprit behind the emergence of financial fragility. The empirical tests conducted by Robert Pollin on the genesis of financial crisis as proposed by Minsky revealed that "the profit rate, for Minsky, is a much more ambiguous and less significant analytic category" than it is from the perspective of Classical economics. As Paul Davidson and other Post-Keynesians have insisted, Minsky saw the business environment where investment decisions are hatched swept by winds of uncertainty. Post-Keynesians support the necessity of rejecting neoclassical economics in order to develop a model or paradigm firmly rooted in the real world and historical time.
