Steve Keen's Debtwatch

In a (for me!) brief pre­sen­ta­tion with 7 slides, I explain why ris­ing pri­vate debt nec­es­sar­i­ly caus­es increased inequal­i­ty, and leads to an eco­nom­ic cri­sis when the rate of growth of debt exceeds the rate of decline of wages as a share of nation­al income. Cru­cial­ly, the actu­al break­down is pre­ced­ed by an appar­ent peri­od of tranquility–a “Great Mod­er­a­tion”.

This was a short talk to a pub­lic audi­ence at ESCP Europe in Paris, which was pre­sent­ed in Eng­lish and also trans­lat­ed into French by Gael Giraud, Chief Econ­o­mist of the French Devel­op­ment Agency and the trans­la­tor of Debunk­ing Eco­nom­ics (so the sound­track is in both Eng­lish and French).

We are hir­ing two new staff at Kingston Uni­ver­si­ty: one per­ma­nent posi­tion at Asso­ciate Pro­fes­sor lev­el, and one short-term con­tract to cov­er an absent col­league.

If you’d like to work at one of the few plu­ral­ist-friend­ly eco­nom­ics depart­ments in the world, and you’re suit­ably qual­i­fied, please fol­low the links below for more details and to sub­mit your appli­ca­tion. Or if they don’t work–as a cor­re­spon­dent has told me–send an email to jobs@kingston.ac.uk ask­ing for details.

Asso­ciate Pro­fes­sor posi­tion

Short-term lec­tur­er posi­tion

The dead­line for appli­ca­tions is tight: they are due by June 26.

This is a talk I gave in Tel Aviv, Israel at the invi­ta­tion of the Rethink­ing Eco­nom­ics Stu­dent Forum there (which is a mem­ber of the Inter­na­tion­al Stu­dent Ini­tia­tive for Plu­ral­ism in Eco­nom­ics), and at the Pales­tine Eco­nom­ic Pol­i­cy Research Insti­tute in Ramal­lah, Pales­tine. I cov­er the defin­ing fea­tures of Neo­clas­si­cal Eco­nom­ics, con­trast these with Post Key­ne­sian Eco­nom­ics, and sim­u­late a debt defla­tion using the Open Source mod­el­ling pro­gram Min­sky.

I was inter­viewed by Chris Menon from Every Investor last week and asked to com­ment on the eco­nom­ic poli­cies of the two major par­ties in the UK elec­tion. Chris’s intro­duc­tion to the inter­view is below; click here to see the inter­view itself.

In an exclu­sive inter­view with Every Investor, Pro­fes­sor Steve Keen from Kingston Uni­ver­si­ty has warned that politi­cians who pro­mote aus­ter­i­ty eco­nom­ics are naïve.

The econ­o­mist, who was one of the few who pre­dict­ed the Great Reces­sion, warned last year that the US and UK economies wouldn’t make a sus­tain­able recov­ery due to the prob­lem of high lev­els of pri­vate debt – pub­lic debt being more a symp­tom than a cause of this eco­nom­ic malaise.

My last post sup­port­ing the use of non­lin­ear mod­els (“You Do Need A Weath­er­man”) gen­er­at­ed some thought­ful respons­es, main­ly along the lines of this post by Ari Andri­copou­los enti­tled “A View on the Eco­nom­ic Mod­el Debate from a Non-econ­o­mist (but some­one who builds mod­els for a liv­ing)”. The basic argu­ment is that a full non­lin­ear mod­el of any sig­nif­i­cant eco­nom­ic process would be too com­pli­cat­ed, and that it was bet­ter there­fore to stick with tractable lin­ear mod­els, while keep­ing in mind that the real world is non­lin­ear:

I’ve just come back from the annu­al Insti­tute for New Eco­nom­ic Think­ing con­fer­ence in Paris, where the Pres­i­dent of INET Rob John­son is infa­mous for open­ing every ses­sion he chairs with an apt set of lyrics from the 1960s. I’ve aped Rob here by mis­quot­ing one of Bob Dylan’s great lines “You don’t need a weath­er­man to know which way the wind blows”. In fact, you do.

Click here to read the rest of this post.

My inter­view starts at 3 min­utes 48 sec­onds into the pro­gram.

A Twit­ter fol­low­er accused me of being “a lit­tle nasty” with my last blog post (see Fig­ure 1). He was right, and I don’t apol­o­gize.

I’ve spent 40 years try­ing to high­light just how lim­it­ed the dom­i­nant ideas in eco­nom­ics are. But even I didn’t ful­ly appre­ci­ate how tiny the intel­lec­tu­al gene pool behind these ideas was.

Then, as I start­ed to write a post on the eco­nom­ic issues in the Bernanke-Sum­mers debate, I re-read Sum­mers’ orig­i­nal sec­u­lar stag­na­tion post and real­ized that, not mere­ly were the ideas com­ing from a sin­gle per­spec­tive, most of the major pro­po­nents of these ideas came not only from the same Uni­ver­si­ty (MIT), and even the same sem­i­nar (Class 14462, con­duct­ed by Stan­ley Fish­er).

Ben Bernanke has recent­ly start­ed blog­ging (and tweet­ing), and his open­ing top­ics were why inter­est rates are so low around the world, and a cri­tique of Lar­ry Sum­mers’ “sec­u­lar stag­na­tion” expla­na­tion for this phe­nom­e­non, and for per­sis­tent low growth since the finan­cial cri­sis. Sum­mers then replied to Bernanke’s argu­ment, and a debate was on.

Click here to read the rest of this post.

There are many ways that you can divide the world into two groups. Men and women, for example—with the for­mer being about 50.2% of the pop­u­la­tion and the lat­ter 49.8%. Or those that like math and those that don’t—where there are no accu­rate fig­ures, but I’d haz­ard a guess at a 10% to 90% split.