Module 2, Lesson 2.2: The Bad: Destabilizing Financial Behavior and Markets

Written By SCEPA

In this second lesson of Module 2, Associate Professor Paulo dos Santos discusses the bad in the functioning of capitalist economies. He considers instability and crises in market functioning, and argues that a decentralised capitalist economy has persistent difficulties coordinating individual decisions in ways that sustain high measures of economic activity, incomes, and employment.

By the end of this video (4/5), learners will be able to:

  • Explain why self-interested financial behavior by individuals and entities can result in overall financial instability

  • Describe the three different financing and investment behaviors identified by Hyman Minsky

  • Explain how asset-price bubbles develop as a result of profit-seeking behaviors.

SCEPA
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Module 2, Lesson 2.2: The Bad: Aggregate Demand, Liquidity, and Financial Behavior
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Module 2, Lesson 2.2: The Bad: What to Do About This