Econintersect: This 40 minute lecture shows how the simplest model of labor and capital produces non-equilibrium behavior when fitted with real data. Furthermore, intimately related functions can both be functionally similar but in different phases through time. Keen shows this for the time variant modeled behavior of unemployment and wage level. The two have an average correlation near zero, yet the two are interdependent (strongly) with phase lags.
Keen maintains that phase diagrams are essential tools of analysis for non-equilibrium systems and gives an elementary demo using unemployment rate and wage level functions.
In the lecture Keen traces the economic thinking about non-equilibrium economic systems with mentions of Marx, Marshall, Saffra, Schumpeter, Irving Fisher, Keynes, Goodwin and Minsky.
This is one of the most content packed 40 minutes you can get about fundamentals of economics.
Click here to view the lecture immediately preceeding this one.
