Written by John Lounsbury
How Did This Come About?
How Keen came to this juncture is a long story which will only be summarized here. For a number of years he has been Associate Professor of Economics at the University of Western Sydney. Through a series of policy decisions with regard to admissions the number of students enrolling in economics course declined sharply over the past few years; so the university decided to stop offering a major in economics and terminated most of the faculty.
Having been involved in university and institutional research funded by grants I think I know what happened next. Research grants Keen had obtained to support his research would have been assigned by the grantors to his university, dependent upon his performance of the research. Once his relationship with the university was ended the grants would also be terminated. And that brings us to the appeal to the general public to find funds to keep the research continuing.
What Came Next
From GEI News:
Keen has chosen to continue his research and, at least for now, it will be outside a university setting. That is why he has made an appeal for backers through a Kickstarter appeal.
The following is a video summary of the Kickstarter appeal:
The status of the campaign as this is being written is shown in the caption graphic at the beginning of the article.
What is Minsky
Minsky is a computer program named after one of the most under-appreciated economists of the 20th century, Hyman Minsky. Minsky (the economist) is now known for his studies of the lack of equilibrium in economic systems that lead to periods on instability. The essence of the approach of Minsky (the computer program) is to use tools that have been developed to create mathematical models for design and operation of engineering systems.
Application of such tools has nothing to with the application of physics or mechanics equations to economic systems. The process is to iteratively define mathematical relationships between variables using experimental data.
My Shortlist of What Keen is Doing That is Worth Supporting
There is an extended discussion of the Minsky project (and follow-ons) at the website at Kickstarter.
Here I will simply list some of the important things that I see being addressed as this project continues:
- Economic variables will be empirically developed as functions of time, mathematically f(t);
- Models of economic functions will explicitly contain money, debt and credit;
- Economic functions will comply with double entry accounting rules;
- Relationships between economic variables will have dimensional units integrity (see note later);
- Modeling functions will be dynamic and continually evolving with each new step along the future timeline;
- Modeling will include non-linear functions (polynomials, exponentials, etc.) currently ignored in many economic models;
- Models will be mathematically consistent with multi-variant analysis practices in all fields of science and engineering.
Notes on Dimensional Unit Integrity
The recognition of units forces a consistency of analysis that will lead to a precise use of:
- economic stocks,
- time rate of change of stocks (flows) and
- the acceleration of change (time rate of change of flows).
Supporting Steve Keen
I am one of the 399 who has given a pledge to Minsky, although I must admit it was less than the $147.51 average for all contributors. But for me it was a substantial contribution. I hope that readers will get some understanding of why I feel that this support was important. I hope that my arguments have not been too wonky.
I strongly recommend you visit the Minsky Kickstarter page, learn about this research in much greater depth and make whatever contribution you can manage.
Disclosure: Steve Keen is an occasional contributor to Global Economic Intersection.