Volatility, financial crises and Minsky's hypothesis
Danielsson, J.
, Valenzuela, M. & Zer, I.
(2015).
Volatility, financial crises and Minsky's hypothesis.
VoxEU,
, Valenzuela, M. & Zer, I.
(2015).
Volatility, financial crises and Minsky's hypothesis.
VoxEU,
Does low volatility in financial markets mean that another financial crisis is more likely? And should we be worried when everything is OK? This column presents the first empirical results that find a strong validation of Minsky's hypothesis – obtained from 200 years of historical cross-sectional data – that low volatility increases the likelihood of a future financial crisis by increasing risk-taking.