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MMT in Minsky at the 2nd Poznan MMT Summer School 2022

Summary:
This is a live demonstration of using the free, Open Source system dynamics program Minsky to illustrate the fundamental points of "Modern Monetary Theory". As I say at the end, Minsky is my gift to the #MMT community, and I would be delighted if MMT advocates adopt it to establish the fundamental insights of MMT that flow from the strictly correct accounting of financial stocks and flows that Minsky enables. I use the latest beta version of Minsky, which you can download from https://sourceforge.net/projects/minsky/files/beta%20builds/. This version implements Minsky's front end in the Javascript programming language, replacing the Linux-based Tcl/Tk front end the program has had since its inception in 2012. We will very soon release version 3.0 of Minsky, so before you download,

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This is a live demonstration of using the free, Open Source system dynamics program Minsky to illustrate the fundamental points of "Modern Monetary Theory". As I say at the end, Minsky is my gift to the #MMT community, and I would be delighted if MMT advocates adopt it to establish the fundamental insights of MMT that flow from the strictly correct accounting of financial stocks and flows that Minsky enables.



I use the latest beta version of Minsky, which you can download from https://sourceforge.net/projects/minsky/files/beta%20builds/. This version implements Minsky's front end in the Javascript programming language, replacing the Linux-based Tcl/Tk front end the program has had since its inception in 2012. We will very soon release version 3.0 of Minsky, so before you download, please check to see whether the Download button at https://sourceforge.net/projects/minsky/https://www.patreon.com/ProfSteveKeenSourceForge links to Minsky 3.0 , or whether it points to the final Tcl/Tk version (2.3.51). If the latter, download the latest beta; if the former, just use the download button.



Though Minsky is free software, developing Minsky is not free. We would appreciate financial support to either or both of myself (via https://www.patreon.com/ProfSteveKeen or https://profstevekeen.substack.com/) and Minsky itself (via https://www.patreon.com/hpcoder) to keep its development going.
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.

21 comments

  1. What is that enoying sound?

  2. Class conflict, also referred to as class struggle and class warfare, is the political tension and economic antagonism that exists in society because of socio-economic competition among the social classes or between rich and poor.forms of class conflict include direct violence such as wars for resources and cheap labor, assassinations or revolution; indirect violence such as deaths from poverty and starvation, illness and unsafe working conditions; and economic coercion such as the threat of unemployment or the withdrawal of investment capital; or ideologically, by way of political literature. Additionally, political forms of class warfare include: legal and illegal lobbying, and bribery of legislators.

  3. 40 billion for Ukraine war without anyone asking who's going to pay for it another example of MMT 😂

    • Yes, that's quite correct. As was the manner in which WWII was financed, and by both sides. I'm glad you've had that insight. 😎

  4. Nathan Surendran

    Steve, how do you factor energy constraints into this model?

  5. Demetris Gizelis

    I’m glad to tell you Steve you ain’t gonna get a Nobel prize. And this would be the highest honour to you!

  6. Has anyone attempted to model the entire U.S economy on Minsky? What about other major economies around the world? I know the software is open; are there any serious models up on GitHub to pull down and play with?

    This is fascinating!

    • Thanks. And yes: there's Pedro Pratas's model of the Portuguese economy, using Godley Tables; Tyrone Keynes's models of the pandemic; Nick Jackson's model of the shadow banking system. They're not on GitHub (we want to establish a model repository, but lack of resources has impeded that), but you can find some models at http://www.profstevekeen.com/minsky/. When I have time 🤣 I'll put the aforementioned models there too.

    • @ProfSteveKeen thanks! Perhaps you can just set up a scrappy GitHub repo for model sharing until you can get resources to build something custom.

  7. How about accounting for the depreciation of durable consumer goods? What is NDP, Net Domestic Product?

    We are listening to economists who can't do algebra.

    NDP = GDP – Dcap   [Western economic calculation]
    NDP  = GDP – (Dcap + Dcon)  [reality]

    Dcap: Depreciation of Capital Goods 
    Dcon: Depreciation of Durable Consumer Goods

    GDP: Grossly Distorted Propaganda

    • Though I really enjoyed reading "Grossly Distorted Propaganda". That was good!

      Gross Investment (flow) – Capital Depreciation (flow) = Fixed Capital (stock) / capital output ratio (constant) = Output or GDP (auxiliary)

      Durable consumer goods that depreciate contribute to GDP via the replacement cost. It provides employment (income) and that income is spent (expenditure)

      An understanding of the difference between stock flows and auxiliaries also is a plus.

    • @Tyrone Keynes
      Yeah, the peons are supposed to work their lives away going into debt to buy garbage designed to become obsolete while economists ignore demand side depreciation.

  8. Minethis1 Real Macro Investing

    "Accounting" has destroyed 158 economies since 1960.

    So much for assets liabilities = 0

  9. For "Close Restaurant" (with the pandemic modelling) wouldn't you need to know how many restaurants there are per e.g. 1000 citizens ? Or how busy they are?

    • I did factor that in when I built the model. All the constant/parameters values were set to data from British Columbia Canada. Basically, I use linear regression, to compare when the restaurant/dining restrictions were implemented and compared to case counts 7 days later. From that, I used my best guess to come up with a time constant that controlled the doubling-time of exposure rates. Then I ran the model to see if it fit the data and made adjustments as necessary. I did the same thing with the other restriction parameters as well.

  10. Humans are so optimistic. Things aren't the way they are because of gross negligence. Wealth is represented by debt, the more the merrier. Debt only exists because people are constantly saturated with needs and wants. More so needs that are manipulated to keep people in their place.

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