Didier Darcet
10 September 2021

The Snake That Bites Its Own Tail

A Minsky moment resembles a snake attack: a sudden and violent destructive move, much like a stock market crash. It originates in a slow psychological process according to economist Hyman Minsky, namely a gradual weakening of the financial system through mounting debts in periods of irrational euphoria.

Can we verify this hypothesis? And is the Minsky moment actually unpredictable?