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Steve Keen

Steve Keen

Steve Keen (born 28 March 1953) is an Australian-born, British-based economist and author. He considers himself a post-Keynesian, criticising neoclassical economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include John Maynard Keynes, Karl Marx, Hyman Minsky, Piero Sraffa, Augusto Graziani, Joseph Alois Schumpeter, Thorstein Veblen, and François Quesnay.

Articles by Steve Keen

Redirecting to Patreon

July 30, 2021

If you’re look­ing for my lat­est work, please click here to go to my Patre­on site. This site is main­tained for his­tor­i­cal rea­sons only.

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July 30, 2021

I main­tain this site for his­tor­i­cal rea­sons only. If you’re look­ing for my lat­est work, please go to

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Discussing a Modern Debt Jubilee on Macro’n’Cheese

December 19, 2020

I dis­cuss a Mod­ern Debt Jubilee On Macro’n’Cheese today, and this is a quick expla­na­tion of how it could be done.
Jubilees were com­mon in antiq­ui­ty. The Lord’s Prayer did not orig­i­nal­ly say “And for­give us our sins, as we have for­giv­en those who sin against us”, but “And for­give us our debts, as we also have for­giv­en our debtors”. But an old-fash­ioned Jubilee would reward those who gam­bled with bor­rowed mon­ey, and thus effec­tive­ly penalise those who did not. It would also effec­tive­ly bank­rupt the banks, since their assets—our debts—would fall, while their liabilities—our deposits—would remain con­stant.
A Mod­ern Debt Jubilee gets around both prob­lems by:
Giv­ing every­one, whether they bor­rowed or not, exact­ly the same amount of mon­ey; and

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To save the climate – don’t listen to mainstream economists

December 8, 2020

Ann Pettifor’s The Coming First World Debt Crisis (Pettifor 2006) was the first book to warn of the approaching 2007 Global Financial Crisis. More than decade after that crisis, its cause—excessive private debt, created primarily to finance asset bubbles rather than productive investment—is still with us, while we are entrapped in a pandemic crisis, and on the cusp of a climatic one.
Figure 1: Private debt levels over the history of capitalism
Looking forward to the next ten years, and given so little has been done to stabilize the system, stagnation was the likely outcome of the residue of private debt, but Covid has altered the equation to make a crisis, without a boom before it, the likely outcome.  The first two crises were ignored by mainstream economists and politicians until after

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The Unreal Basis of Neoclassical Economics

January 22, 2019

By Al Campbell, Ann Davis, David Fields, Paddy Quick, Jared Ragusett and Geoffrey Schneideroriginally posted hereIntroduction
Ten years after the financial crisis, we still find mainstream
economists engaging in overly simplistic analysis that does not
accurately capture the dynamics of the real world. People studying
economics need to know that the principles of mainstream economics are
hopelessly unrealistic. In this short article, we demonstrate that the
ten principles of economics in Gregory Mankiw’s best-selling textbook
are divorced from reality and reflect an extreme and unwarranted bias
towards unregulated markets.[ii] Mankiw’s “Ten Principles of Economics” should more accurately be titled “Ten Principles of Unrealistic Neoclassical Theory.”Mankiw’s Principle #1:

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On the URPE Blog – The Video Edition

May 23, 2018

The Dynamics of Capitalism: Money and Financialization
Greta Krippner – The Power of Abstraction: Marx on Money and Credit
Aaron Sahr – From Pen Strokes to Keystrokes: the Production of Money in Early and Contemporary Capitalism Michael Löwy: Marxism and Romantic Anticapitalism
Michael Löwy is Emeritus Research Director at the CNRS (French National Center for Scientific Research) Lecturer, École des Hautes Études en Sciences Sociales. Immanuel Wallerstein: The Contemporary Relevance of Marx
Immanuel Wallerstein – Marx’s Capital ​after 150 Years: Critique and Alternative to Capitalism (York University, Canada) Richard D. Wolff: Linking Trump and Marx’s Critique of Capitalism
Richard D. Wolff Professor of Economics Emeritus, University of Massachusetts, Amherst, and currently a Visiting

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Capitalism is national & transnational, but what about the money?

June 27, 2017

This is my short response, originally posted here, to William I. Robinson’s post here and Fred Magdoff’s note in the comment section of that post:While I generally agree with Robinson’s and Magdoff’s analyses, what is absent, specifically with respect to Robinson’s discussion, is a concrete assessment of the acute variables that measure the degree to which national States have the capacity to engage in power-maximizing behavior and, thus, pursue certain responses, i.e. imperialism, to the competitive nature of the capitalist world economy. Certain material capabilities of national States generate the space to be ‘constituted’, whereby they embody a structural authority to shape the framework of global economic relations. This structural authority is tied to the qualification to

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Shutting down membership

June 7, 2017

I have recently estab­lished a Patreon site, where peo­ple can sup­port my research and advo­cacy work with dona­tions start­ing at $1/month. That is now where I will engage in con­ver­sa­tion in response to posts. So if any­one here wants to con­tinue a dia­logue with me and oth­ers, please sign up there.
This site was flooded by a large num­ber of spam users at the same time as I became unable to main­tain my own role in dis­cus­sions here, since I am just too damn busy in Lon­don. This has caused the site to be sus­pended three times by its ISP for per­for­mance issues. One more time and the account will be banned. I have there­fore decided to delete all users on this site, bar those who have made posts (which is a hand­ful of

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Brexit debate in London May 31st

May 27, 2017

I’m tak­ing part in a debate on one of the major top­ics in this year’s elec­tion, Brexit, on May 31st at 7.30pm at Can­ham, 40 Sheen Lane, Lon­don SW14 8LW. The other speak­ers are Frances Cop­pola, and Angus Arm­strong.
Frances Cop­pola is an eco­nomic com­men­ta­tor in print and fre­quently on the BBC.
Angus Arm­strong is direc­tor of macro-eco­nom­ics at one of the top research insti­tu­tions, the National Insti­tute of Eco­nomic and Social Research founded in 1938.
Click here to buy tick­ets for this event.

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Freezing site/Moving to Patreon & Profstevekeen

May 25, 2017

I’m freez­ing this site and mov­ing to both Patreon ( and a new web­site There are sev­eral rea­sons:
This site’s signup secu­rity failed, and some­thing like 50,000 bot-users have signed up. It’s just too cum­ber­some in Word­Press to delete them selec­tively from here, so it’s eas­ier to move to a new, clean site;

I used to be very active in dis­cus­sions here, but the demands on my time became so exces­sive over time that I have vir­tu­ally stopped par­tic­i­pat­ing;
I am going to retire from Kingston Uni­ver­sity next year (prob­a­bly in July), and if I am to con­tinue being a pub­lic intel­lec­tual and resid­ing in Lon­don (which, what­ever its other faults, is the best place in the world from which to be a

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Discussing “Can we avoid another financial crisis?”

May 1, 2017

From WEA Commentaries
My first book since Debunking Economics has just been released in the UK, and will come out in May in the USA. Can we avoid another financial crisis? is a brief (140 page, 25,000 word) explanation for the lay reader of how the 2008 crisis was caused by factors that mainstream economics ignores—fundamentally, the levels of private debt and credit-based demand—and why other countries that avoided a crisis in 2008 are likely to suffer a similar crisis in the near future.
My argument is based in equal measure on my interpretation and model of Hyman Minsky’s Financial Instability Hypothesis (though my book is equation-free), and my analysis of the role of endogenous money—which I now prefer to call “Bank Originated Money and Debt” or BOMD—in causing both economic booms and slumps. The book relies upon the statistical work of the BIS, which since 2014 has started publishing detailed databases on private debt, government debt, house prices, and recently consumer prices. This has made it possible for me to analyse the debt and credit dynamics of 43 countries to identify which have had a crisis, and which are likely to have one in the future.

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What if my analysis is used for evil purposes?

April 21, 2017

One of my Patrons posed a very good question to me: in a nutshell, how would I respond to a politician who took my ideas and perverted them for political gain? Here’s Andre’s full query:
Hi Steve, thank you, you’ve given me the gift of some of the most important ideas and explanations I’ve come across in my lifetime.
I was wondering how you might respond to a politician who misreads your latest book, and then declares:
1.  People will love me, because Steve Keen says I can become known as a master of managing my country’s economy by engineering a private debt boom
2.  People will love me, because when private debt eventually falters, Steve Keen says I get to tell everyone they get more government spending on them, because public debt is justified to offset lack of accelerating private debt
3.  Even if some people grumble about me enlarging the state, they’ll definitely love me when I tell them they’re all getting tons of free money in a debt Jubilee straight into their bank account and/or their debts partially repaid for them.
4.  Best of all, after a few days of announcing everyone gets more public spending and free money in their bank account, the country’s private debt load will be reduced enough that we can start another private debt boom!

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Can we avoid another financial crisis?

April 12, 2017

Help me rebuild economics at
Can we avoid another financial crisis?
In 2008, conventional economics led us blindfolded into the greatest economic crisis since the Great Depression. Almost a decade later, with the global economy wallowing in low growth that they can’t explain, mainstream economists are reluctantly coming to realise that their models are useless for understanding the real world.
How did mainstream economists not see the crisis coming? Was it unpredictable, as they now assert, or did their theory blind them to the real causes? Will another financial crisis occur?
These questions and others are asked and answered in Can we avoid another financial crisis? , a short (25,000 word) explanation for the lay reader of how we got into this economic mess, and why we are unlikely to get out of it.
The book is available now in the UK. It will come out in mid-May in the USA. A e-book version will also be available in May.
Support my work by becoming my Patron on Patreon. Economics is broken, and Universities won’t fund the repair job. Research funding is controlled by and goes overwhelmingly to Neoclassical economists.

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Support me on Patreon

March 17, 2017

Click here to support me on Patreon
As I explain in this video, government attempts to turn University entrance into a marketplace have had the unintended side-effect of undermining pluralist economics. The UK government has removed controls on the number of places that Universities can offer in first year courses, and as a result there has been an increase in humanities places offered by highly ranked Universities. Final year high school students have flocked to these Universities, and enrolments at lower-ranked Universities have fallen substantially.
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This has the side effect of undermining non-mainstream economics, just when the world has started to appreciate that another approach is needed. The reason is that over the last four decades, Neoclassical economists have driven out non-Neoclassical staff out of the most prestigious Universities. Only lower-ranked Universities gave non-Neoclassical staff a chance, which is why pluralist economics programs have developed there and nowhere else. Now these programs are under threat as a by-product of this attempt to create a University marketplace.
When I first came to Kingston in 2014, they were happy for me to spend much of my time engaging with the public through blog posts, media appearances, and public talks.

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Infrastructure conference in Westminster Tuesday 24th

January 16, 2017

A new organisation called NEKS (for “New Economic Knowledge Services”, see is holding its inaugural conference on the economics of infrastructure In Westminster on Tuesday January 24th, and you should attend.
Why NEKS, and why Infrastructure? The economic importance of infrastructure is obvious, but the actual performance of infrastructure often differs radically from what is predicted when it is being planned. Three forms of delusion make many infrastructure projects far less beneficial than expected by their proponents: the complexity of execution is underestimated, the benefits are overestimated, and benefits are also calculated poorly using dodgy economic theory.
These are precisely the sort of issues that NEKS was formed to address. NEKS’s objective with this conference is to provide a real understanding of how complexity and uncertainty—including the impact of actual human behaviour and institutions—affect large public infrastructure projects. These issues are simply not adequately considered by the current “cost-benefit” method of evaluating projects, which relies heavily on mainstream economic concepts of marginal cost and marginal utility.

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Teaching Economics the Pluralist Way

December 30, 2016

This is a talk I gave in Amsterdam to launch the Amsterdam Rethinking Economics critique of the current state of economics “education” in the Netherlands. The text of my slides is reproduced below.
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Teaching Economics the Pluralist Way
Steve Keen
Kingston University London
Minsky Open Source System
General Principles
Teach Honestly: “Warts and All” treatment of every school
–Read the original sources—journals & books—not textbooks
Let experts teach maths & computing, not economists
Facts exist & are not theory-neutral
–Rules of accounting versus Money Multiplier
–Great Depression Soup Kitchens versus RBC “voluntary unemployment” myths
–Decline of Soviet Union versus Marxist faith in socialism
Learn Economic History & History of Economics
Learn modern “complex systems” approach to dynamics from mathematicians (see
Learn computing & multi-agent modelling from computer scientists
Look at the “Cliodynamics” approach to history
–Arguably doing what economists should always have be doing
Use the Web for academic freedom where Universities suppress it
Teach Honestly
Economics textbooks have “airbrushed” economic theory
Teach Honestly
Absurdities like “Ricardian Equivalence” look reasonable in textbooks

Teach Honestly
Look more dubious when you read original article:
“Suppose now [i.e.

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Prof. Steve Keen on private debt and his solution people’s QE

December 12, 2016

I’ve had some tough interviews over the years (such as the BBC HARDtalk! interview earlier this year with Stephen Sackur), but I’d have to credit the student interviewers at the University of Amsterdam’s Room for Discussion event with giving me the toughest, well-informed grilling my ideas have had in public. I’m following up later today with a keynote speech at the Dutch Rethinking Economics event tonight, and I’ll post that here later this week.
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My Speech at Occupy Sydney Five Years Ago

October 24, 2016

Apparently it’s the fifth anniversary of the day I gave this talk, to the Occupy movement in Sydney, in Martin Place, right outside the offices of the Reserve Bank of Australia. The day after, the site was shut down by the police. It seems I was jinxed, because the same thing happened in New York, the day after I simply dropped off a couple of copies of my book Debunking Economics. The speech holds up pretty well, though I’ve developed my technical arguments a lot since then.
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Olivier Blanchard, Equilibrium, Complexity, And The Future Of Macroeconomics

October 4, 2016

I have observed and appreciated Olivier Blanchard’s intellectual journey over the last decade. It began in August 2008, with what must be regarded as one of the worst-timed papers in the history of economics. In a survey of macroeconomics entitled “The State of Macro”, he concluded, one year after the financial crisis began, that “The state of Macro is good” (Blanchard, 2008). However, Blanchard did not remain locked into that position, and he had the rare intellectual courage to say so in public and in academic papers. His most recent post, before the one I am responding to today (“Further Thoughts on DSGE Models: What we agree on and what we do not”), stated that, far from the state of macro being good:
There are many reasons to dislike current DSGE models. First: They are based on unappealing assumptions. Not just simplifying assumptions, as any model must, but assumptions profoundly at odds with what we know about consumers and firms. (Blanchard, “Do DSGE Models Have a Future?”, August 2016)
I have commented on several of Olivier’s papers on the progress between “The State of Macro” and “Do DSGE Models Have a Future?”, and he references one of my comments (“The need for pluralism in economics”) in this most recent piece (as well as others by  Narayana Kocherlakota, Simon Wren-Lewis, Paul Romer, Anton Korinek, Paul Krugman, Noah Smith, Roger Farmer, and Brad Delong).

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Incorporating energy into production functions

September 5, 2016

From Steve Keen
In my last post on my Debtwatch blog, I finished by saying that the Physiocrats were the only School of economics to properly consider the role of energy in production. They ascribed it solely to agriculture exploiting the free energy of the Sun, and specifically to land, which absorbed this free energy and stored it in agricultural products. As Richard Cantillon put it in 1730:
The Land is the Source or Matter from whence all Wealth is produced. The Labour of man is the Form which produces it: and Wealth in itself is nothing but the Maintenance, Conveniencies, and Superfluities of Life. (Cantillon, Essai sur la Nature du Commerce in Général (Essay on the Nature of Trade in General)
Quesnay’s famous but neglected “Tableau Economique” therefore described the agricultural sector as “the productive sector” and manufacturing as “sterile”—see Figure 1.
Figure 1: Quesnay’s “Tableau Economique“, first drafted in 1759, two decades before Watt’s steam engine
This was a justified assertion at the time, given that the Physiocrats wrote before the Industrial Revolution—and in particular the widespread exploitation in manufacturing of stored solar energy in fossil fuels– and originated in France, which was then overwhelmingly a rural nation.

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Incorporating energy into production functions

August 19, 2016

In my last post on my Debtwatch blog, I finished by saying that the Physiocrats were the only School of economics to properly consider the role of energy in production. They ascribed it solely to agriculture exploiting the free energy of the Sun, and specifically to land, which absorbed this free energy and stored it in agricultural products. As Richard Cantillon put it in 1730:

The Land is the Source or Matter from whence all Wealth is produced. The Labour of man is the Form which produces it: and Wealth in itself is nothing but the Maintenance, Conveniencies, and Superfluities of Life. (Cantillon, Essai sur la Nature du Commerce in Général (Essay on the Nature of Trade in General)

Quesnay’s famous but neglected “Tableau Economique” therefore described the agricultural sector as “the productive sector” and manufacturing as “sterile”—see Figure 1.
Figure 1: Quesnay’s “Tableau Economique“, first drafted in 1759, two decades before Watt’s steam engine

This was a justified assertion at the time, given that the Physiocrats wrote before the Industrial Revolution—and in particular the widespread exploitation in manufacturing of stored solar energy in fossil fuels– and originated in France, which was then overwhelmingly a rural nation.

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BBC Hardtalk on reforming economics

August 15, 2016

This interview, which was just recorded today, will go to air tomorrow. The broadcast details are:
BBC News Channel: 02.30 BST, 04.30 BST and 20.30 BST Tuesday 16th August 2016, and 00.30 BST Wednesday 17th August 2016

And from the 04.30 TX it will then be available within the UK on BBC iPlayer for one year.
BBC World News Channel: 03.30 GMT; 08.30 GMT; 14.30 GMT and 19.30 GMT Tuesday 16th August 2016
It will also go out at numerous timeslots on Friday on the BBC World Service.
And from early Friday morning it can be downloaded as a podcast – from anywhere in the world – from here:

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The need for pluralism in economics

August 13, 2016

For decades, mainstream economists have reacted to criticism of their methodology mainly by dismissing it, rather than engaging with it. And the customary form that dismissal has taken is to argue that critics and purveyors of alternative approaches to economics simply aren’t capable of understanding the mathematics the mainstream uses. The latest instalment of this slant on non-mainstream economic theory appeared in Noah Smith’s column in Bloomberg View: “Economics Without Math Is Trendy, But It Doesn’t Add Up“.
Figure 1: Noah’s tweet announcing his blog post

While Noah’s column made some valid points (and there’s been some good off-line discussion between us too), its core message spouted five conflicting fallacies as fact:
The first (proclaimed in the title supplied by the Bloomberg sub-editor rather than by Noah) is that non-mainstream (or “heterodox”) economics is not mathematical;
The second is that the heterodox mathematical models that do exist can’t be used to make forecasts;
The third, that there are some that can make forecasts, but these have so many parameters that they are easily “over-fitted” to existing data and therefore useless at prediction (and they lack sufficient attention to human behaviour);
The fourth, that though heterodox economists make a song and dance about developing “stock-flow consistent” models, mainstream models are stock-flow

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Inequality, Debt and Credit Stagnation

July 4, 2016

This was my keynote speech at the French Association for Political Economy (AFEP) annual conference in Mulhouse, France (the other keynote was given–in French–by my good friend Marc Lavoie, who is now based at the University de Paris 13). In this presentation, I:
Disparage the “secular stagnation” explanation that Larry Summers has regurgitated for the tepid level of economic growth today. As did Hansen in the 1930s, Summers ponders “why growth would remain anaemic in the absence of major financial concerns?“, when financial concerns are obvious if you understand credit;
Explain why credit plays a crucial role in both aggregate demand and aggregate income, once you understand that banks originate loans rather than act as financial intermediaries; and
Show that my 1992 complex systems model of Minsky’s “Financial Instability Hypothesis” can be derived by working from strictly true macroeconomic identities, in an alternative to Lucas’s “microfoundations” approach to building macroeconomic models.

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What next after Brexit?

June 27, 2016

A cliché—“Expect the Unexpected”—has happened. As I noted in “The Divisive Brexit Vote”, though I favoured Brexit, I took the opinion polls at face value, and expected that Britain as a whole would vote to remain in the EU. Instead, in the largest electoral turnout in twenty years, the UK voted 52:48 in favour of leaving the EU.
I’ll leave a post-mortem of the vote itself for later; the main interest now is what will happen because of it. Many pundits from the Center, Left and Right opposed Brexit in the belief that economic Armageddon for Britain and the globe would flow from it; we’ll now see how realistic their fears were. I regard them as seriously overblown, for a number of reasons.

Click here to read the rest of this post.

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The Divisive Vote Over Brexit

June 22, 2016

Andrew Watt has written a passionate critique of my support for Brexit (“Progressive economists should support Remain not Brexit – a response to Steve Keen”), and it highlights a key feature of this peculiar referendum: people who normally find themselves on the same side in most economic and political debates have been divided by this referendum.
Andrew comments that he broadly agrees with my economic analysis on most issues, but vehemently opposes me here. Likewise, good friends like the heterodox economist Geoffrey Hogdgson; Ann Pettifor, who led the successful Jubilee 2000 campaign to cancel the debt of the world’s poorest nations; and Yanis Varoufakis, who knows a thing or two about the EU, all strongly support Remain.
But many other economic colleagues, such as Richard Werner, support Brexit as I do. Richard states his position this way:
The economics is clear: there is no need to be a member of the EU to thrive economically, and exiting does not have to impact UK economic growth at all. The UK can remain in the European Economic Area, as Norway has done, or simply agree on a trade deal, as Switzerland did, and enjoy free trade – the main intention of European agreements in the eyes of the public.
The politics is also clear: the European superstate that has already been formed is not democratic.

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There has to be a better way

June 18, 2016

Note: This was published as my last column on Business Spectator on April 6th, but it’s now gone missing after News Ltd merged BS with its own in-house stable and changed all the URLs. Given the election and Elizabeth Farrelly’s excellent thought piece in the Sydney Morning Herald “The great tragedy of Malcolm Turnbull“, I thought it was a good time to revive it.
One of the disadvantages of growing up is finding in your old age that people you never took seriously in your youth are now running your country.
In my personal case, I’m speaking about Tony Abbott and Malcolm Turnbull—but if I’d gone to University at the same time and place as Kevin Rudd, I’m sure I’d be speaking about him too.
I knew Abbott and Turnbull in their Sydney University days: they were both active student politicians, while I was one of the leaders of the student revolt against the economics curriculum there. Abbott and Turnbull both tried to play a role in this “Political Economy” dispute—and their approach then mirrors their styles today. One believed he knew the word of God, while the other believed he was God.
Abbott tried to defeat what he described, in his peculiar nasal drawl, as “the Maarxists” behind the protests.

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CERN Discovers New Particle Called The FERIR

May 16, 2016

CERN has just announced the discovery of a new particle, called the “FERIR”.
This is not a fundamental particle of matter like the Higgs Boson, but an invention of economists. CERN in this instance stands not for the famous particle accelerator straddling the French and Swiss borders, but for an economic research lab at MIT—whose initials are coincidentally the same as those of its far more famous cousin.
Despite its relative anonymity, MIT’s CERN is far more important than its physical namesake. The latter merely informs us about the fundamental nature of the universe. MIT’s CERN, on the other hand, shapes our lives today, because the discoveries it makes dramatically affect economic policy.
CERN, which in this case stands for “Crazy Economic Rationalizations for aNomalies”, has discovered many important sub-economic particles in the past, with its most famous discovery to date being the NAIRU, or “Non-Accelerating Inflation Rate of Unemployment”. Today’s newly discovered particle, the FERIR, or “Full Employment Real Interest Rate”, is the anti-particle of the NAIRU.
Its existence was first mooted some 30 months ago by Professor Larry Summers at the 2013 IMF Research Conference. The existence of the FERIR was confirmed just this week by CERN’s particle equilibrator, the DSGEin.

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Zombies-To-Be and the Walking Dead of Debt

May 9, 2016

Using the dynamics of credit–which most other economists ignore–I explain why Japan, the USA and UK are among the “Walking Dead of Debt” and why China, Canada, Australia and South Korea are on their way to joining the Debt Zombies. This presentation is based on work I’m doing for a new 25000 word book for Polity Press entitled “Can we avoid another financial crisis?”, which should be published later this year.
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Transcending the Lucas Critique & simple dynamic modelling with Minsky

April 17, 2016

The Lucas Critique has ruled economics for the last 40 years, and led it into a dead-end as well. In this talk to the Economics for Everyone conference run by the Post Crash Economics Society in Manchester, I argue that micro-founded models fail because of the emergent properties that characterise complex systems. An alternative approach that transcends Lucas’s well-founded objection to ad-hoc model-building is to build models from strictly true macroeconomic identities. I show that three simple identities–the employment rate, the wages share of income, and the private-debt-to-GDP ratio–are sufficient to build a simple dynamic model that generates the possibility of a financial crisis. I also give a high-speed but I think comprehensible tutorial on using Minsky, the Open Source monetary modelling program.

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