1 / 18

Are We “It” Yet? Debunking Economic Myths with Steve Keen

Explore the biggest debt bubbles in history and the critical relationship between aggregate demand, debt, and GDP. Analyze unemployment patterns from 1920 to 2010 and the impact of debt-financed spending. Learn about Minsky's Ponzi finance concept and its implications on economic stability. Discover a new dynamic modeling approach inspired by Godley's SAM model. Access the Vissim viewer program for simulations and delve into intricate financial flow dynamics with the Minsky-Circuit model. Check out the free resources and updates at www.debtdeflation.com/blogs/qed.

billie
Download Presentation

Are We “It” Yet? Debunking Economic Myths with Steve Keen

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Are We “It” Yet? Steve Keen University of Western Sydney Debunking Economics www.debtdeflation.com/blogs www.debunkingeconomics.com

  2. Are We “It” Yet? • Biggest debt bubbles in history...

  3. Are We “It” Yet? • “If income is to grow, the financial markets … must generate an aggregate demand that, aside from brief intervals, is ever rising. • For real aggregate demand to be increasing, … it is necessary that current spending plans, summed over all sectors, be greater than current received income • and that some market technique exist by which aggregate spending in excess of aggregate anticipated income can be financed. • It follows that over a period during which economic growth takes place, at least some sectors finance a part of their spending by emitting debt or selling assets.” (Minsky 1982, p. 6; emphasis added)

  4. Are We “It” Yet? • Aggregate Demand • Debt and GDP

  5. Are We “It” Yet? • Aggregate demand & unemployment 1920-1940 R2=-0.938

  6. Are We “It” Yet? • Aggregate demand & unemployment 1990-2010 R2=-0.955

  7. Are We “It” Yet? • Debt-financed proportion of aggregate demand: Scale of downturn 2.25 years in 2000s Scale of government response 1930s 1930s 2000s

  8. Are We “It” Yet? • Unemployment: end of the storm or just a lull?

  9. Are We “It” Yet? • Far larger Fed response: quantitative easing then & now ?? • “Printing press” may have stopped nascent deflation • But will it be sustained? • Over to modelling...

  10. Are We “It” Yet? • Minsky: Ponzi finance extension to Keen 1995 Click here to download Vissim viewer program • Click on icon to run simulation after installing Vissim Viewer

  11. Are We “It” Yet? • Circuit: Which gives more “bang for buck”—rescuing bankers or debtors? • Click on icons to run

  12. Are We “It” Yet? • Integrating Minsky & the Circuit • Debt-deflationary dynamics in strictly monetary Minsky-Circuit model • “The Great Moderation”, then “The Great Crash”

  13. Are We “It” Yet? • Stability is destabilizing...

  14. Are We “It” Yet? • Income inequality • Not worker vs capitalist but worker vs banker

  15. Are We “It” Yet? • QED: a new approach to dynamic modelling • Inspired by Godley SAM approach • Extended to continuous time • Ideally suited to financial flows • Model dynamics via a GodleyTable:

  16. Are We “It” Yet? • Equation entry:

  17. Are We “It” Yet? • Automatically generate “Forrester Diagram” • Similar to standard systems engineering • Simulink, Vissim, Ithink, Stella, Vensim • And also “Phillips Diagram”...

  18. Are We “It” Yet? • Tribute to Bill Phillips... • Freely available at www.debtdeflation.com/blogs/qed • Updates will be posted there

More Related