HeterodoxFrom 1950s
Post-Keynesian economics
What if the future is genuinely unknowable, demand drives everything, and banks create money?
The 30-second version
Keynes's radical heirs. The future is genuinely uncertain, banks create money when they lend, and stability itself breeds the next crisis (Minsky). They stressed financial fragility before 2008, but remain outside the mainstream.
Big questions it works on
Go deeperKey ideas, thinkers, evidence and where it stands today
Key ideas
- Radical uncertainty: the future cannot be reduced to probabilities.
- Endogenous money: banks create money when they lend.
- Minsky's financial instability hypothesis: long periods of stability encourage risk-taking that ends in crisis.
- Income distribution drives demand and growth.
Key thinkers
Joan Robinson, Nicholas Kaldor, Michał Kalecki, Hyman Minsky, Paul Davidson; today Marc Lavoie, Steve Keen
What it got right
“Minsky moment” became standard shorthand in 2008. The Bank of England's 2014 Quarterly Bulletin confirmed that most money is created by commercial banks lending.
Main criticisms
Less formalised and less unified than the mainstream, with fewer sharp testable predictions. Some claims to have foreseen 2008 were made after the fact.
Evidence worth knowing
Bank of England, “Money creation in the modern economy” (Quarterly Bulletin, 2014 Q1).
Where it stands today
Niche in top departments, active in heterodox journals and some policy circles.
Family line
Followers of Keynes who rejected the mainstream “neoclassical synthesis” version of him.