BAGEHOT, MINSKY, AND KINDLEBERGER.

BAGEHOT, MINSKY, AND KINDLEBERGER. Back in 2007 and 2008, I posted on Walter Bagehot and Hyman Minsky in connection with the financial crisis. (Nick commented about my post on Bagehot’s recommendations for 1873 here in March 2008: “So to sum up, Bernanke is using an old idea, and you agree that it’s the right move?”) Now, two distinguished economists (J. Bradford DeLong and Barry Eichengreen) have written a preface to a reissue of Charles Kindleberger’s THE WORLD IN DEPRESSION 1929-1939, in which they summarize Professor Larry Summers’s position that Bagehot and Minsky and Charles Kindleberger are still the best guides to a financial crisis: (“… what was useful for understanding financial crises was to be found not in the academic mainstream of mathematical models festooned with Greek symbols and complex abstract relationships but in the work of the pioneering 19th century financial journalist Walter Bagehot, the 20th-century bubble theorist Hyman Minsky, and ‘perhaps more still in Kindleberger'”). DeLong and Eichengreen say: “Summers was right.”