Veblenian and Minskian financial markets

The purpose of this paper is to provide an exposition of Veblen's and Minsky's views on the financial markets and to explore the possibility of any common denominators. I stress that they both bring forward the importance of leverage as a path-breaking insight, as well as of liquidity and solvency in the real-world financial markets characterized by uncertainty, innovations and evolving institutions. I remark that Veblenian and Minskian financial markets are naturally and endogenously unstable, nonneutral and influence ‘real’ economic performance. I argue that if Veblen's institutional logic in his business enterprise system became integrated with Minsky's financial processes of creation and destruction, it could set up a realistic framework to analyse the evolution of financial markets in capitalism.