Quotes from “Skepticism about Minsky’s Financial Instability Hypothesis”

By Lawrence White (2014)

• It would also be a mistake to think that the volume of checking account balances identically equals the volume of bank loans, or that banks automatically issue money in amounts corresponding to the quantity of investment and housing loans demanded by approved borrowers. Banks fund loans with non-deposit as well as deposit liabilities, and they intermediate deposit liabilities into non-loan assets (e.g., by holding reserves or bonds) as well as into loan assets. #
  Banking
• An appeal to swings in investor optimism/pessimism or ‘animal spirits’ is not wrong, so much as it merely pushes the question back one stage: What explains the swings in investor enthusiasm?#
  Methodology