Steve Keen’s Debt Watch

I had prepared a set of slides on "Can we avoid another financial crisis?", but with an audience exclusively of economics students at Sheffield University today, and pressed for time, I "went rogue", and challenged the limited nature of the "education" they get in economics today. Gee it felt good! I've endured seeing rubbish portrayed as reason in economics for 45 years now, and I've hardly been silent about it of course. But I really cut loose tonight. 46 years ago, I was doing what...

Ricardo's theory of trade is in many ways the foundation of conventional economic thinking: output and welfare can be increased by removing barriers to markets reaching equilibrium prices. In this case, the barriers are restraints on international trade, and output and welfare are increased by each country specialising in the good(s) in which it has a comparative advantage. The key fallacy in the argument is the belief that machinery can be switched from one industry to another without...

This talk was a pleasure to give, because for once I was talking to an audience who completely understand Complex Systems (unlike the vast majority of economists), but in the case of "EASY"--the "Evolutionary and Adaptive Systems Research Group"(http://www.sussex.ac.uk/easy/)--they apply this methodology to analysing the brain and consciousness. I outline Minsky (downloadable from https://sourceforge.net/projects/minsky/), the system dynamics platform I designed for economics to enable...

As I note in the opening, money and monetary policy shape our lives and politics, but almost everything that is convntionally believed about it, especially by mainstream economists, is wrong. I show how the Federal Reserve Governors & Federal Open Market Committee clearly believe in the "money multiplier" model, which is a logical fallacy. They are trying to manage a system they don't understand.

Economic theories of all persuasions have ignored the role of energy in production ever since Adam Smith's Wealth of Nations was published, yet at the same time have attempted to answer the question of where the physical surplus of outputs over inputs (or the increase in utility caused by production) has come from. This lecture gives an overview of the basics of the relationship between energy and useful work, and argues that the economic theory of value has to start from acknowledging the...

Cambridge University is one of many leading universities where economics students get no exposure to non-mainstream approaches to economics in their curriculum. The students have therefore organised their own Society for Economic Pluralism, and they asked me to speak on "Can we avoid another financial crisis?". I also covered alternative approaches to economic modelling to the mainstream DSGE approach, including: applying Neural Networks to Macroeconomics, which one of my best PhD students...

This lecture for my first year ("Level 4") students at Kingston covers Neoclassical modeling from its microeconomic beginnings to the evolution of macroeconomics in response to the Great Depression, Hicks's Neoclassical IS-LM general equilibrium model of Depressions versus "normal times", and ultimately the development of Real Business Cycle models. The next lecture covers the development of DSGE models and the crisis in modelling when these models completely failed to anticipate the Great...

I tidy up the predator-prey model developed in the previous video, demonstrate some (overdue!) new features of Minsky such as search and replace, spot a couple of bugs, and make some justifiably disparaging remarks about a recent crop of Neoclassical papers that described critics of DSGE models as "dilettantes".

This is the key feature of Minsky in comparison to all other System Dynamics platforms: it is the only one to use double-entry bookkeeping to build models of financial flows. This is an inherently superior paradigm to using flowcharts to model monetary dynamics. I build a basic model which nonetheless shows that models of capitalism without banks, debt and money are useless, and then show just how far Minsky can go in modelling capitalism by showing Pedro Pratas' monetary model of Portugal.

Minsky is excellent for demonstrating the behaviour of complex system models like Lorenz's model of fluid turbulence. It's also perfect for showing how little most economists know about dynamics. I have a go at Professor Reis from the LSE for trying to rescue economic modelling by claiming that weather forecasting 3 to 5 years in advance isn't very good either...