In 1977 American Professor Hyman Minsky developed the so called Financial Instability Hypothesis which proposes that financial crisis are endemic in capitalism because periods of economic prosperity encouraged borrowers and lender to be progressively reckless.

In 1977 American Professor Hyman Minsky developed the so called Financial Instability Hypothesis which proposes that financial crisis are endemic in capitalism because periods of economic prosperity encouraged borrowers and lender to be progressively reckless.

In an essay of 3,000 words or less, analyse the current crisis seen in cryptocurrencies explain and apply Minsky’s theory of financial instability to explain the root causes of the loss in value in cryptocurrencies we have seen over the past few weeks in May 2022.

Rationale for assessment design:

The assessment for this module consists of one element, a critical appraisal of the Financial Instability Hypotheses applied to the current state of many cryptocurrencies to test your ability to properly reproduce and explain economic theories in a contemporary context and to develop acritical appraisal of the literature around the theory.