Subject The paper summarizes theoretical approaches of Russian and foreign authors to understanding the essence, causes and specifics of financial instability. It also considers financial instability of the Russian economy and its indicators. Objectives The main purpose is to systematize modern theories of financial instability and estimate the key indicators of instability of the Russian economy. Methods We apply general scientific methods of analysis, comparison, generalization, and statistical methods for economic data processing. Results The article discusses the financial instability hypothesis developed by H. Minsky from the perspective of its applicability to various economies, including Russia. We identify groups of major imbalances that undermine the sustainable functioning of the economy, show the interrelation of instability and financial innovation, the role of globalization in crisis spill-over, specificity of decision-making process under instability, and the impact of financial liberalization on financial instability. As for the Russian economy, the paper presents indicators of strong influence of instability factors on fiscal and monetary policy. Conclusions The findings enable to conclude on complex relationships between processes in unstable economy, financial market instruments, global imbalances, and the behavior of economic agents. Despite certain positive trends in the Russian economy, there is a number of factors (a fall in real incomes, increasing poverty, low efficiency of government expenditures, etc.) that testify to ongoing recession and impossibility to achieve sustainable growth in the near future.
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