Steve Keen, Secular Stagnation and Thoughts on IS-LM

Steve Keen has produced a nice little article on secular stagnation as an explanation of the crisis, as brought up by Larry Summers and then endorsed by Paul Krugman, and its clash with the theory of endogenous money.

Secular Stagnation: A Mystery No More

I’m sorry, I couldn’t help it: when Larry Summers first made his secular stagnation speech at the IMF, and the American economics tribe heralded it as if it were the greatest (and latest) thing since sliced bread, my irony gene went into overload-and that showed in my first post on the topic.

When Economic Theory Fails the Math Exam

Eight years ago, in December 2005, I began warning of an impending economic crisis that would commence when the rate of growth of private debt started to fall. My warnings hit a popular chord:

Calm Before A Deathly Debt Storm

by Steve Keen, Debunking Economics In Need or Just Lazy? In 1992, I built a model of Minsky’s ‘Financial Instability Hypothesis’ that simulated the debt-induced breakdown he argued could happen in a capitalist economy. But it also had an unexpected feature: the breakdown was preceded by a period of apparent stability. Initial volatility gave way …

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 global economy at all in his 1937 paper, which attempted to explain the relationship between …