Steve Keen’s Debt Watch

This is a basic, introductory lecture on locating and displaying data for First Year economics students at Kingston.

(This is an incomplete lecture due to a lack of time to prepare it: what I should have spent 2 months preparing I had to do in 2 weeks--while also moving house. Hopefully I'll find the time to complete it when writing next year's lectures.) I cover the reasons why the Neoclassical growth model--on which both RBC (Real Business Cycle) and DSGE (Dynamic Stochastic General Equilibrium) models are based--has an unstable equilibrium. Given their Neoclassical fetish for seeing stable equilibrium...

This lecture starts by showing that IS-LM was in fact a Walrasian General Equilibrium model, not a Keynesian model. Neoclassicals like Lucas didn't know this, but also wanted to construct a macroeconomics that was built directly from microeconomics. The first stage here was Muth's invention of the concept of "Rational Expectations" in the context of attacking the Cobweb Model of cycles in a single market.

The 1870s founders of Neoclassical economics Jevons and Walras would find today's Neoclassical economics unfathomable, because it has been built of a series of failures to find the kinds of answers that Neoclassical economics wanted to find to logical questions. Not only would the answers have disappointed these Neoclassical pioneers, the way that their descendants reacted to them produced an economics that is radically different to what its founders built. For Jevons and Walras, the market...

I criticise all schools of thought in economics as having a blindspot on the relationship between economics and ecology. I explain the Laws of Thermodynamics and the fact that nothing can be produced without energy, and yet theories of production in both Neoclassical and Post Keynesian economics ignore this. I show how energy could be incorporated. I cover the inevitability of reaching a maximum level of energy consumption per head, and the impact of Limits to Growth on the viability of our...

The defining question for Post Keynesians was put by Hyman Minsky in 1982: "Can "It"-a Great Depression-happen again? And if "It" can happen, why didn't "It" occur in the years since World War II? These are questions that naturally follow from both the historical record and the comparative success of the past thirty-five years. To answer these questions it is necessary to have an economic the ory which makes great depressions one of the possible states in which our type of capitalist...

The core question posed by Austrian economists (beginning with Menger) was "how does innovation and change occur in a market economy?". Though they shared many of the same concepts as the mainstream--supply and demand analysis, and the belief that "value" was subjective rather than objective--they diverged on many others, especially on how much knowledge could be had about the economy. Neoclassicals began with attempting to analyse the economy as if it were in equilibrium, because their...

Mainstream "Neoclassical" Economics began with the legitimate question, first posed by Leon Walras in the 1870s, of "can a set of interdependent markets reach equilibrium where supply equals demand in every market, without any central coordination?" He invented the model of "tatonnement": he imagined that all traders for all markets met in a room with an auctioneer who starting from a random set of prices, kept adjusting prices to try to have demand equal supply for all commodities, and only...

This second lecture covers the standard exposition of supply and demand theory, and then explains how the individual demand curve is derived, which obeys the so-called "Law of Demand", that demand necessarily falls for a product when its relative price rises. I then cover the Sonnenschein-Mantel-Debreu theorem, which shows that this "Law" does not survive aggregation: when you consider more than one consumer in isolation, the "income" and "substitition" effects of a relative price change...

This first lecture introduces my section of this subject: five lectures on Neoclassical economics, three on Post Keynesian, and two on Marxian. I start this lecture with the criticisms of Neoclassical economics by The Guardian's Economics Editor Larry Elliott, and the response of several IFS (Institute for Fiscal Studies) economists arguing that Elliott misunderstood the role of simplifying assumptions in economics. They draw an analogy between simplifying assumptions in economics and the...