What should we learn from Hyman Minsky about Financial Crisis?

Does the Current Financial Crisis Vindicate the Economics of Hyman Minsky?

Frank Shostak writes:

The currently observed turmoil in financial markets, which is believed to have been ignited by the collapse of the subprime mortgage market, has recently brought to prominence the ideas of Hyman Minsky (1919–1996), a prominent member of the post-Keynesian school of economics.

Many commentators are of the view that Minsky's framework of thinking accurately anticipated the current financial crisis.

While most mainstream economists are of the view that economic busts are the outcome of various external shocks to the economy, Minsky held that, even in the absence of such shocks, the capitalistic economy has an inherent tendency to develop instability, which culminates in severe economic crises.

The key mechanism that pushes the economy towards a crisis is the accumulation of debt. FULL ARTICLE

Helge: This is the shock therapy of economic growth. I've to check out what Minsky has to say and comment more later. The signs are here...

According to Minsky, the financial structure of a capitalist economy becomes more and more fragile during the period of prosperity. In short, the longer the prosperity, the more fragile the system becomes. Minsky argued,

In particular, over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance.[2]

This framework of thinking comprises the essence of what Minsky dubbed the "Financial Instability Hypothesis" (FIH).