The recent revival of Hyman P. Minsky's ideas among policymakers, economists, bankers, financial institutions, and the mass media, synchronized with the increasing gravity of the subprime financial crisis, demands a reappraisal of the meaning and scope of the 'financial instability hypothesis'...

This paper aims to help bridge the gap between theory and fact regarding the so-called 'Minsky moments' by revisiting the 'financial instability hypothesis' (FIH). We limit the analysis to the core of FIH-that is, to its strictly financial part. Our contribution builds on a reexamination of...