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The Minsky Models of Modern Monetary Theory 07 #TMMOMMT

Seventh of twelve videos showing the construction of models of the monetary aspects of Modern Monetary Theory in Minsky. Download Minsky from and support Minsky's development at for as little as a month

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Seventh of twelve videos showing the construction of models of the monetary aspects of Modern Monetary Theory in Minsky. Download Minsky from and support Minsky's development at for as little as $1 a month
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.


  1. Sadly I don’t have the intelligence to understand most of your videos. But i do wonder what you think about the monetary policy that is being utilised across the globe. Particularly in the US by the Federal Reserve. Some kind of MMT frankenstein from what i can tell. Examples would be buying corporate debt, ETF’s, manipulating the money supply, something about foreign currency exchange credit lines (US giving other countries US currency by taken that local currency) and so on.

    • You found professor Keen & for that you can consider your fortune to be VERY GOOD !

      Don't yourself , sell short. — Yoda

      A good formal , public education teaches how to learn, lifelong. That diploma is only the beginning.
      Search YouTube for MMT founders : 
      Warren Mosler
      Bill Mitchell
      L R Wray
      Stephanie Kelton
      Pavlina Tcherneva
      And definitely watch the YouTubes of America's National Treasure : Cowboy Economist
      Feeling a little angry ?
      Angrynomics also helps .

      And ask a question of MMTed .

      And spend a buck a month, if you can,
      and support professor Keen at P A T R E O N

    • Stevo1361 the federal reserve doesn’t target the money supply at all currently – at least thus it implies. This is due to its use of simple sum monetary aggregates which have failed to perform satisfactorily since the 90s. That led to the discontinuation of the reporting of M3 and L aggregates, leaving only M2 and M1. A notable exception is the St Louis Fed’s reporting of the MSI (Monetary Services Index) which is a Divisia aggregate of the M2 measure of the money supply (which means there’s a non-linear weighting of the different components to account for the different extent to which they perform a role as liquidity services, rather than being interest bearing assets with different risk profiles).

      Currently the Fed still at root follows a Taylor rule as far as I know, which embodies a dual mandate towards price level stability and addressing the output gap (unemployment, roughly). However; the Fed has increasingly become aware of its international role as the issuer of the global reserve currency, which includes not only excess foreign exchange reserves in emerging markets but also trade credit and similar transactions being mostly dollar denominated. Thus shortages in the global dollar supply can lead to severe business cycles (even the value of the dollar more generally, see BIS publications on that), hence the extension of dollar swap lines to foreign central banks in order to avoid a dollar liquidity crunch.

      Regarding its purchase of debt securities, this is in large part due to the leveraging of corporate America from what I can tell, which was quite substantial in the run-up to this crisis. Given current circumstances such an intervention was necessary to prevent widespread illiquidity and insolvency, at least that’s my understanding of this matter I am less well acquainted with. I must admit that ETF purchases is something that puzzles me too, though I believe the purchases have been restricted to certain types – I would look for justifications based on which ETFs it purchased.

      In general, a useful way to view such actions by the Fed is as monetary asset swaps. The Fed gives somebody very liquid monetary assets in return for (currently) quite illiquid assets. This eases liquidity problems faced by the corporation in question. The question is whether the asset obtained by the Fed in this way is good collateral in the Classic Bagehot sense or whether the Fed is acting as a Dealer of last resort in that instance. On that I’d recommend checking out Perry Mehrling’s Economics of Banking course, it’s quite instructive (you can find it uploaded in full here on YouTube).

      Hope that’s helpful.

    • Mitso great reply. Thanks Mitso.

    • Dear Stevo1361, this article written by Michael Hudson, with Dirk Bezemer, Steve Keen and T.Sabri Öncü address your question. It is called 'The Use and Abuse of MMT', written in April 2020.

  2. Harry Kiralfy Broe

    Professor Keen is blowing orthodox economic theory out of the water with his model – I do wonder what those neoclassical economists have been doing for the last 30 years, other than diddling around and sucking corporate and central banker ? ?!

  3. Thanks

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