Friday , November 11 2022
Home / Steve Keen’s Debt Watch (page 47)
The author 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.

Steve Keen’s Debt Watch

Why Neoclassical Economists Didnt See the Great Recession Coming

Mainstream "Neoclassical" Economists famously did not see the Great Recession coming, and when you look at their theories, it's no wonder. Their favourite model prior to the crisis goes by the name of "Dynamic Stochastic General Equilibrium", or DSGE. These models imagined that the entire economy could be modeled as a single individual. Yet neoclassical researchers proved decades ago that even a single market can't be modeled that way. I explain this proof while outlining the fundamental...

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The failure of Neoclassical Macro and the Monetary Circuit Theory Alternative

In writing Debunking Economics II, I realized a transcendental truth: neoclassical economists don't understand neoclassical economics. They instead have a superficial, textbook appreciation of their school of thought, which makes it appear coherent. But in fact deep research, often done by neoclassical economists, establishes that the theory is incoherent. I outline one essential aspect of this--the Sonnenschein-Mantel-Debreu conditions--and show that they are a "proof by contradiction"...

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Australia’s vulnerablity to China

China's successful industrialization was built on export oriented growth polices that enticed Western companies--US in particular--to relocate production to China. Unlike the rest of the developed world, China ensured that it got ownership of the capital as well as employment. But China's recent growth may reflect more of a credit-bubble than export-led or domestic demand led growth, which could make Australia vulnerable to a credit-induced slowdown in China.

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KeenThinkingAboutHousePrices.flv

What REALLY causes house prices to rise? After debunking the standard "population growth" argument, I show that the real motive force for rising house prices is accelerating mortgage debt: for house prices to rise, mortgage debt must not merely increase, but increase more rapidly over time. That requires ever rising mortgage debt compared to income, which of course is impossible. That's why house price bubbles always burst, and the Australian bubble is finally bursting now.

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The Population-House Price Myth

The property lobby consistently argues that the driving force beneath rising house prices is rising population. Even a cursory examination of the data shows that this is not true. The real force is accelerating mortgage debt, as I'll explain in a screenshow presentation to be uploaded shortly

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Australian Housing Myths: Responsible Lending

Australian banks claim that the reason the US had a housing crisis was because American lenders were irresponsible, while Australian banks were much more responsible in who they lent to. If that's so, why has Australian mortgage debt risen from half the US level (compared to GDP) in 1990 to more than 10% higher now?

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Prof Steve Keen: Will there be a Double Dip in the USA? Part Two

Professor Keen explains the private debt dynamics that caused both the Great Depression and the Great Recession. The Great Recession will end when private debt is much lower than it is now--even though it's fallen by 30% of GDP since the peak, it's still 100% higher than at the start of the Great Depression. A slowdown in the rate of decline of debt actually caused much of the recent recovery, but Professor Keen expects that this slowdown will pass and a double dip will occur. Part Two of...

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Prof Steve Keen: Will there be a Double Dip in the USA? Part One

Professor Keen explains the private debt dynamics that caused both the Great Depression and the Great Recession. The Great Recession will end when private debt is much lower than it is now--even though it's fallen by 30% of GDP since the peak, it's still 100% higher than at the start of the Great Depression. A slowdown in the rate of decline of debt actually caused much of the recent recovery, but Professor Keen expects that this slowdown will pass and a double dip will occur....

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