Steve Keen's Debtwatch

The lat­est “Pet­ty” ver­sion of Min­sky final­ly qual­i­fies as a 1.0 release: there are enough sys­tem dynam­ic and user-inter­face fea­tures in it to declare it a sta­ble release. We’ll mod­i­fy it to remove any bugs that are identified–and I just spot­ted one inter­mit­tent one involv­ing wiring (see https://sourceforge.net/p/minsky/tickets/324/)–but oth­er­wise this will remain a sta­ble release, with no new fea­tures to be added.

From now on, new fea­tures will be added in the “Mun” devel­op­ment fork.

You can down­load the PC ver­sion from here:

https://sourceforge.net/projects/minsky/files/latest/download

The Mac ver­sion is avail­able here:

https://sourceforge.net/projects/minsky/files/Mac%20Binaries/

Anoth­er elec­tion is on in Aus­tralia, and the top­ic du jour – the polit­i­cal top­ic du cen­tu­ry it seems – is that, hor­ror of hor­rors, the government’s bud­get next year will be in deficit to the tune of $30 bil­lion! It’s a scan­dal! Our debt is bal­loon­ing! And it’s all Labor’s fault! Why, all you have to do is look at the respon­si­ble Howard peri­od – falling debt – and com­pare it to the irre­spon­si­ble Labor peri­od – ris­ing debt – and you know who to vote for, don’t you?

Fig­ure 1: From the respon­si­ble Howard to the irre­spon­si­ble Rudd?

Well there’s a rose in the fist­ed glove
And eagle flies with the dove
And if you can’t be with the one you love hon­ey
Love the one you’re with
(Stephen Stills 1970)

As I not­ed in the pre­vi­ous post, I’m work­ing with the Governor’s Woods Foun­da­tion to pro­duce a com­pre­hen­sive data set on pri­vate debt for its Debt-Eco­nom­ics project (see www.debt-economics.org). As part of that, last week I real­ized that the Flow of Funds data on finan­cial sec­tor debt wasn’t what I had hoped it was, and I had to revise down my esti­mates of the US pri­vate debt to GDP ratio from 1952 till today. That revi­sion implied that today’s “Peak Debt” lev­el was low­er than that of the Great Depres­sion.

I haven’t had much luck with ISPs recent­ly! One had a total hard­ware crash that wiped my entire blog out–fortunately a sup­port­er was able to recon­struct it (at a cost of many grey hairs!). I then moved to anoth­er… who had a seri­ous sys­temic out­age for sev­er­al days.

In the process, my Ama­zon AWS ser­vice went AWOL, mak­ing it impos­si­ble for me (or any­one else) to log on to the site. The lat­ter prob­lem has been fixed; the for­mer is being addressed by anoth­er sup­port­er (who has­n’t as yet acquired as many grey hairs!).

This is the third arti­cle in a three-part series on the self-destruc­tion of neo­clas­si­cal eco­nom­ic the­o­ry. See part one here and part two here.

To say that the long self-destruc­tion of the aca­d­e­m­ic eco­nom­ic tra­di­tion was giv­en a final push towards the cliff by the glob­al finan­cial cri­sis paints a pret­ty bleak pic­ture of the future of the dis­mal sci­ence. But I can also see some rays of sun­shine.

The first is to look out­side the Acad­e­my, to for­mal eco­nom­ic bod­ies – to cen­tral banks and Trea­suries in par­tic­u­lar. In the past, these bod­ies uncrit­i­cal­ly repro­duced what­ev­er was the lat­est fad in aca­d­e­m­ic eco­nom­ics (wit­ness the rapid shift from IS-LM and AS-AD mod­els to DSGE mod­els when aca­d­e­m­ic econ­o­mists pro­claimed that the for­mer fell vic­tim to the Lucas Cri­tique).

Floyd Nor­ris, the chief finan­cial cor­re­spon­dent of the New York Times, has writ­ten an arti­cle enti­tled “The Time Bernanke Got It Wrong” on Bernanke’s sup­port of “poli­cies that allowed the dan­ger­ous imbal­ances to grow and bring on the cri­sis” in which he cites Hyman Min­sky and my work mod­el­ling Min­sky’s Finan­cial Insta­bil­i­ty Hypoth­e­sis.

If, after read­ing this post, you’d like to read some Min­sky, or see the paper of mine that Floyd cit­ed, please fol­low those links.

If you’d like to con­tact me, please go to the “About” page of this blog.

This is the sec­ond arti­cle in a three-part series on the self-destruc­tion of neo­clas­si­cal eco­nom­ic the­o­ry. See part one here.

As the neo­clas­si­cal eco­nom­ics tra­di­tion grad­u­al­ly gave up its cen­tral posi­tion in uni­ver­si­ties over the last forty years, it remained tri­umphant in the real world. But the glob­al finan­cial cri­sis brought a sud­den, shock­ing end to this exhuberism.

The fail­ure of neo­clas­si­cal mod­els to antic­i­pate it (and the suc­cess of many non-ortho­dox the­o­rists to do so – includ­ing me, but also Wynne God­ley and his col­lab­o­ra­tors using a sec­toral bal­ances approach, Ann Pet­ti­for, Michael Hud­son, Nouriel Roubi­ni, Dean Bak­er, and numer­ous Aus­tri­an-informed com­men­ta­tors) sud­den­ly called into ques­tion the role of the tra­di­tion.

Forty years ago, any stu­dent who enrolled in an under­grad­u­ate degree at the Fac­ul­ty of Eco­nom­ics at Syd­ney Uni­ver­si­ty in 1971 had to com­plete four year-long cours­es in eco­nom­ics, out of a total of ten such cours­es: Micro­eco­nom­ics and Quan­ti­ta­tive Meth­ods in the first year, Macro­eco­nom­ics in the sec­ond, and Inter­na­tion­al Eco­nom­ics in the third.

INET has just released an inter­view with my reseach col­league and now good friend Pro­fes­sor Matheus Gras­sel­li, the Deputy Direc­tor of the Fields Insti­tute, one of the world’s lead­ing insti­tutes for applied math­e­mat­i­cal research. He presents a lead­ing math­e­mati­cian’s per­spec­tive on math­e­mat­ics as used and abused in eco­nom­ics, and what promise there is for a bet­ter eco­nom­ics in future, based on more mod­ern math­e­mat­ics than is used in Neo­clas­si­cal DSGE mod­els. A high­ly rec­om­mend­ed video:

This is the keynote speech that I gave to the Aus­tralian Teach­ing Eco­nom­ics Con­fer­ence, the paper for which will be the sub­ject of my next two posts: the decline of Eco­nom­ics from up to 40% of any busi­ness degree to about 4% today. In it I sug­gest that het­ero­dox econ­o­mists should com­plete the march to zero by jump­ing ship and join­ing Account­ing depart­ments. There they could devel­op a “Mon­e­tary Eco­nom­ics for Accoun­tants” unit that would replace the stan­dard Intro­duc­to­ry Eco­nom­ics sub­ject required for accred­i­ta­tion as an accoun­tant.