Tag Archives: steve keen

Krugman Doesn’t Understand IS-LM, Part 2

by Steve Keen, Debunking Economics Read Part 1. Krugman’s explanation of our crisis today is straight from the pages of John Hicks’ (pictured) 1937 explanation of the Great Depression (though curiously, Hicks himself didn’t mention the actual state of the … Continue reading

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Krugman Doesn’t Understand IS-LM, Part 1

by Steve Keen, Debt Watch Read Part 2. Krugman describes himself as a “sorta-kinda New Keynesian” (Krugman 2012, p. 104), and explains in End This Depression NOW! (Krugman 2012) that New Keynesian macroeconomics evolved in reaction to the failure of the … Continue reading

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The Great Debate©: Who Saw it Coming?

by John Lounsbury This edition of The Great Debate© is prompted by an essay from Brad DeLong today (30 June 2012) and a rebuttal from Steve Keen.  Before we present those two protagonists we will return to a paper published … Continue reading

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The Great Debate©: Keen and Krugman on Money and Banking

by Steve Keen, Debtwatch with extensive quotations from Paul Krugman Editor’s note: There has been an ongoing exchange between Steve Keen and Paul Krugman over the way that money and banking should be accounted for in the macroeconomy.  Between spurts of … Continue reading

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A Primer on Minsky

by Steve Keen, Debt Watch Editor’s Note: This is the article that started the recent “Keen-Krugman War.”  We will post more on this important economic discussion in the coming days. My paper “Instability in Financial Markets: Sources and Remedies” for … Continue reading

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Credit, Demand and Unemployment

The change in debt is related to the current level of economic activity—on both commodity and asset markets. This explains correlations between the rate of change of debt, the level of output (and hence of unemployment), and the level of asset prices. Continue reading

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Analysis: Top Five in June

The five most read articles published during June in the GEI Analysis Blog are listed. Continue reading

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The Global Financial Crisis Is Not Behind Us

The fundamental cause of the Global Financial Crisis was the excessive level of private debt. The deleveraging has been slowed to some degree by government action, but the need for that deleveraging has not been removed. A majority of the 16 individuals identified in Bezemer (2009) and (Fullbrook (2010)) as having anticipated the Global Financial Crisis followed non-mainstream approaches to economics, with most of them identifying as Post-Keynesian (Dean Baker, Wynne Godley, Michael Hudson, Steve Keen, Ann Pettifor) or Austrian (Kurt Richelbacher, Peter Schiff). The theoretical foundations of these authors therefore differ substantially from those of more mainstream neoclassical economists. This paper focuses on the Post-Keynesian subset, hereinafter referred to as the Bezemer-Fullbrook Group. Continue reading

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Modeling a Multisectoral Economy

It is possible to model the dynamic process by which prices and outputs are set in a multisectoral economy. The failure of the neoclassical school to achieve this objective—which it has had since the time of Walras—may relate to the abstractions it made with the intention of making this process easier to model. Failures are derived from lack of attention to money and to uncertainty. A major fault may be laid at the feet of “rational expectations.” Continue reading

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This Time Had Better Be Different: House Prices and the Banks

Steve Keen looks at 130 years of home value, mortgage debt, total debt and bank stock history. He finds this time is different for the Australian housing bubble, but not in a good way: the effects now could be worse. Continue reading

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Australian Debt Update

Australian house prices are starting a long-term decline driven by a contraction in mortgage debt. Total private debt to GDP ratio is also starting to decline. Continue reading

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