Are Financial Crises Endogenous Phenomena? A Theoretical Analysis

Abstract

This article explores the deep-seated nature of financial crises by comparing major economic theories, from Marx to Minsky. It traces an intellectual evolution, from explanations based on real production imbalances to analyses centred on finance, credit, and debt.

The analysis leads to a clear conclusion: financial instability is endogenous to the system. Crises emerge from its internal mechanisms—credit expansion, speculation, and over-indebtedness, rather than from external shocks. Stability appears only as a temporary and fragile equilibrium. Understanding this internal logic is essential for interpreting modern crises and for building a more resilient financial system.