The Relevance of Kalecki: The Useable Contribution

Abstract

The paper is a to date unpublished contribution by Minsky prepared for a conference at the University of Perugia held in 1986. Minsky intended to revise it subsequently, but the paper was never published. Marcella Corsi, who had attended the 1986 conference, brought a copy to a roundtable held in Rome in September 2012. The paper attracted attention, was subsequently read by some of the roundtable participants, and it was decided to publish it. It contains Minsky's assessment of Kalecki's contribution. According to Minsky, the question of Kalecki’s priority over Keynes with respect to the construction of useable macroeconomics is of secondary importance. What is important is that both Kalecki and Keynes provide elements that are essential components for understanding the behavior of economies with complex financial structures. This is the measure of Kalecki’s greatness. In the context of the present-day debate, the paper is important for its contribution towards establishing a link between the financial and the real sides of the economy. However, it is also a useful reminder to those who, in the present-day debate, reduce Minsky’s contribution to one solely related to a theory of financial fragility providing a financial-only explanation of the recent world crisis: in Minsky’s theory as well as in recent events, financial fragility interacts with increasing inequalities in income distribution. 

JEL Codes: B22, E12, B31