This thesis develops a theoretical framework that attempts to explain the dynamic interactions that lead to episodes of severe financial instability. Adapting Minsky’s Financial Instability Hypothesis to the specific characteristics of financial intermediaries and building on Ferri and Minsky’s ideas regarding the role of thwarting institutions, I propose that financial fragility is the result of a long-wave cycle in financial relations characterized by significant institutional and structural evolution within the U.S. financial system. This evolution results in a preponderance of financial activity undertaken outside the regulatory umbrella while margins-of-safety are eroded, newly innovated financial assets proliferate, and financial intermediaries become more interconnected. The framework generates predicted empirical patterns of variables associated with these characteristics that are compared to empirical evidence from the Global Financial Crisis (GFC). Policy implications of the theoretical construction and empirical exercise are discussed in the context of the reconstructed regulatory framework which has accompanied the GFC.
","abstract_html":"<p>This thesis develops a theoretical framework that attempts to explain the dynamic interactions that lead to episodes of severe financial instability. Adapting Minsky’s Financial Instability Hypothesis to the specific characteristics of financial intermediaries and building on Ferri and Minsky’s ideas regarding the role of thwarting institutions, I propose that financial fragility is the result of a long-wave cycle in financial relations characterized by significant institutional and structural evolution within the U.S. financial system. This evolution results in a preponderance of financial activity undertaken outside the regulatory umbrella while margins-of-safety are eroded, newly innovated financial assets proliferate, and financial intermediaries become more interconnected. The framework generates predicted empirical patterns of variables associated with these characteristics that are compared to empirical evidence from the Global Financial Crisis (GFC). Policy implications of the theoretical construction and empirical exercise are discussed in the context of the reconstructed regulatory framework which has accompanied the GFC.</p>","abstract_has_math":false,"creators":["Brog, Shaun K."],"institution":null,"degree_name":"M.A. in Economics","degree_level":"Masters Thesis","degree_discipline":null,"degree_department":null,"school":null,"contributors":["Yeo Hyub Yoon","Jonathan Sciarcon","Markus Schneider","Robert Urquhart","Daniel Ossa"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2024,"date_issued":"2024-06-15T07:00:00Z","date_published":"2024-06-15T07:00:00Z","updated_at":"2026-07-24T02:01:48Z","subjects":["Financial stability","Global financial crisis","Long-wave cycle theory","Minsky cycles","Stress testing","Economics","Economic Theory","Other Economics","Social and Behavioral Sciences"],"languages":["English (eng)"],"rights":["Copyright is held by the author. User is responsible for all copyright compliance.
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"],"dc:subject":["Financial stability","Global financial crisis","Long-wave cycle theory","Minsky cycles","Stress testing","Economics","Economic Theory","Other Economics","Social and Behavioral Sciences"],"dc:title":["Institutional and Structural Evolution of the U.S. Financial System 1945-2023: The Long-Wave Financial Cycle and the Role of Thwarting Mechanisms"],"thesis:degree_level":["Masters Thesis"],"thesis:degree_name":["M.A. in Economics"]},"updated_at":"2026-07-24T02:01:48Z"}