Crisis 3.2 phase 7 of the Minsky bubble

Hyman P. Minsky was a prestigious economist who died 13 years ago and developed the Inherent Instability Hypothesis, in which he talks about the inevitable formation of bubbles, due to the lack of state regulation of the market. He also described the phases that all financial bubbles go through, in order to be able to predict and combat them in time. The phases of a bubble according to Minsky are:


1st phase: Every financial crisis begins with a shock: a change in economic policy, the invention of a new technology, or it can also be abrupt changes in interest rates.
2nd phaseOnce the change occurs, prices immediately start to rise.

B- speculation
3rd phase: The combination of improved economic conditions and low interest rates promotes easy credit.

4th phase: easy credit boosts consumption and overheats the market in the wake of rising consumer spending

5th phase: Euphoria

C- Pyramid or Ponzi scheme

6th phase:Some speculators realize that they have gone too far and begin to sell.
7th phase: The departure of the experts is felt by the rest of the market.


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  1. [...] to phase 7 of the [...] bubble.

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