Keynes economic theory is among one of the most influential thought of the economy. The Keynes theory did not have great impact in the economy. In my view, investment is the driving work force in the Keynes theory. Keynes theory equips individuals and firms with knowledge on investment, saving, and interest rate. This theory was invented to stress on the significance of the rate of interest in investment. It emphasizes that change on the interest rate causes change in the level of investment on the private and public sectors. I have discovered that Keynes was used to influence the government’s economy and policies.

In my opinion, Keynes’s theory of interest rate and investment links the fluctuating rate of investment to some variables that are determined in the financial market. Since early 1980’s, the act of integrating economic activities with an aim of stabilizing financial stability has become a point of focus. I will focus on Minsky’s intellectual idea about his insightful theories. Latest articles are arguing that his theory provides incomplete account of the current financial crisis. The Keynes theory has tress the roots of financial crisis right back from the time neoliberal model growth was adopted. It was abandoned after the Second World War in the late 1980’s. Keynes theory argues that neoliberal model of growth raised dept and prices of assets with an aim of meet the demand which had been then created by wages stagnation. My view on Minsky’s financial stability hypothesis is that he was trying to explain how the financial markets were able to fill the gaps created by the Keynes theory.

Individuals in the economy have come up and accuse the Minsky’s financial market hypothesis as the cause of financial crisis. According to my view, the interpretation is wrong and misleading. Minsky’s hypothesis played a very essential role in financial crisis. The role was for the larger economy, which involved the neoliberal model. This is because, when the rate of employment increased, the amount of wages. This led to increase in commodity price inflation and increase in rate of borrowing. This was the main cause of financial crisis in the economy. This is now when the Minsky’s hypothesis emerged to fill the gaps.

In my understanding, the Keynes theory majorly focused on interest rate and investments. Prices commodities inflation emerged because they were trying to increase the interest rate so that they could meet the demand and living standard. Reforms in the financial sector remained a dire need for a long time. Financial markets could not identify the root cause of these financial crises because the whole Keynes theory was the problem. According to my perception, the financial crisis could be solved by replacing neoliberal with a new model. The new model should create a perfect link between the employees’ wages and production level.

Financial crisis is a situation which has impact across the globe. It is inevitable since it paralyses cash flow in the global market. It is a major crisis which causes disturbance across the globe. According to my point of view, financial markets constitutes of individuals, firms and institutions. Many financial crises are associated with banking. A number of economists have come up with different causes of economic crisis and their effects. In my view, no individual or firm who has an involvement in a financial market can evade a financial crisis. Financial crisis disrupts the supply chain of an economy which in turn leads to a financial crisis. A good example that I can use is a banking crisis. It is a financial crisis. All individuals who are members of that bank will have to face the crisis. The bank will also face a major loss due to financial crisis either through inflation of currency rate or loosing clients due to increase in the rate of tax.

In my understanding, financial crisis was created by neoliberal model. The weakness of this model was that, it could not establish a good link between investment, the rate of employment and production level. Because of high rate of employment there was increase in the demand of wages. This in turn led to inflation on prices of commodities. The new model had to fill up the gaps which caused financial crisis. Financial crisis is a global issue which affects all who take part in the economy. For effective and efficient management of a financial market, economists should ensure there is a sound cash flow and supply chain within the market.