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Economic theory: making Europe’s crisis worse

Summary:
The mainstream ignorance about money and how it is created has led to the EU policy emphasis on running permanent government surpluses. This mistaken view of government being “like a business” that needs to ensure receipts exceed expenditure is the main reason that Southern Europe is in a Depression now. I compare the crisis in ...

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The mainstream ignorance about money and how it is created has led to the EU policy emphasis on running permanent government surpluses. This mistaken view of government being “like a business” that needs to ensure receipts exceed expenditure is the main reason that Southern Europe is in a Depression now. I compare the crisis in Greece to the USA and show that the cause was the same–a private debt bubble–in contrast to the usual narrative that irresponsible government spending in Greece caused its crisis.


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.

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