Steve Keen's Debtwatch

INET is hold­ing a grad­u­ate stu­dent work­shop pri­or to its upcom­ing ple­nary con­fer­ence in Hong Kong on April 4–7.

The 2‑day work­shop con­sists of a mini course in 20th cen­tu­ry his­to­ry of eco­nom­ic thought and anoth­er mini course on sta­tis­ti­cal learn­ing. Plus, there will be stu­dent pre­sen­ta­tions. INET cov­ers expens­es for trav­el and hotel — this should be quite attrac­tive for stu­dents. Details here:

http://ineteconomics.org/ysi-hong-kong/­work­shop

Stu­dents have to apply online (fol­low link above). The dead­line for appli­ca­tion is Feb 24, so please hur­ry!

I’m speak­ing at a lunchtime sem­i­nar for the Eco­nom­ic Soci­ety of Aus­tralia NSW Branch on Thurs­day Feb­ru­ary 28th, in the Ground Floor East Sem­i­nar Room of the Reserve Bank of Aus­tralia in 65 Mar­tin Place Syd­ney. The func­tion will start with light refresh­ments at 12.15pm, with a 12.30pm start; it will fin­ish between 1.15pm and 1.30pm.

My top­ic is “Explain­ing the Cri­sis Using Pri­vate Debt and Aggre­gate Demand” (see the abstract below). It’s free for mem­bers; if you’re not one, I expect that you would have to join the soci­ety to be able to attend. If you’d like to attend, send an email to ecosocnsw@ecosoc.org.au.

Econ­o­mists are wont to crit­i­cise habits as a sign of irra­tional­i­ty, but they’re often a sen­si­ble rule of thumb that stops us doing oth­er things we’ll lat­er regret.

A case in point: over the years, I’ve devel­oped the habit of not read­ing Ross Git­tins. Last week I broke that habit, and the expe­ri­ence remind­ed me of how sen­si­ble that habit was.

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Help reform eco­nom­ics. Kick­start Min­sky now!: http://t.co/rzFwjEnJ

The Kick­starter cam­paign to raise funds to fur­ther devel­op “Min­sky”, my dynam­ic mon­e­tary sim­u­la­tion pro­gram, has been launched. The imme­di­ate objec­tive is to raise $50,000, which will enable the cur­rent ver­sion of Min­sky to be com­plet­ed. The ulti­mate goal is to raise $1 mil­lion or more to ful­ly devel­op the con­cept.

Click here for the Kick­starter cam­paign. If you have appre­ci­at­ed my work over the last sev­en years to warn about the eco­nom­ic cri­sis, to devel­op an approach to macro­eco­nom­ics that can under­stand why it hap­pened, and to devel­op poli­cies that might help end it, the please show this by mak­ing a pledge.

Ear­ly on Sat­ur­day morn­ing New York time, I’m launch­ing a Kick­starter cam­paign to raise funds to fur­ther devel­op my Min­sky mod­el­ing pro­gram. The draft pitch can be seen here (until the actu­al one goes live):

Draft Kick­starter Min­sky cam­paign

This post is to give a quick “what it is and why it’s new” overview of Min­sky via ten videos in a Youtube playlist.

The simplest example: graphing a simple function

Modeling exponential growth

Exponential growth and exponential decay

Interacting populations–the “predator-prey” model

A simple cyclical economic model (Goodwin’s 1867 Growth Cycle Model)

As I wrote just before the data was released, I expect­ed house prices to rise at a lev­el “either below or bare­ly above CPI infla­tion”:

The ABS House Price Index Data will pub­lished at 11.30am today. My Mort­gage Accel­er­a­tor data indi­cates that it will show a fur­ther rise in house prices—though at an anaemic lev­el of either below or bare­ly above CPI infla­tion.

In fact, the num­bers came out spot on at the rate of CPI infla­tion over the pre­vi­ous year:

Here’s the chart I pub­lished before the fig­ures were released:

The ABS House Price Index Data will pub­lished at 11.30am today. My Mort­gage Accel­er­a­tor data indi­cates that it will show a fur­ther rise in house prices—though at an anaemic lev­el of either below or bare­ly above CPI infla­tion.

The cor­re­la­tion coef­fi­cient between these two series is 0.853.

Recent eco­nom­ic data from both the UK and US should have tak­en the wind out of the sails of those in the Anglos­phere who – despite clear­ly con­tra­dic­to­ry evi­dence from main­land Europe – con­tin­ue to argue that fis­cal tight­en­ing is need­ed for eco­nom­ic growth is to recov­er.

The UK, which has fol­lowed a fis­cal aus­ter­i­ty path right from the elec­tion of the Con­ser­v­a­tive-Lib­er­al coali­tion gov­ern­ment in mid-2010, record­ed a 0.3 per cent fall in the last quar­ter of 2012, while the US record­ed a 0.1 per cent fall (main­ly on the back of declin­ing gov­ern­ment expen­di­ture). Get­ting the gov­ern­ment sec­tor out of the way and let­ting the pri­vate sec­tor rip clear­ly isn’t going accord­ing to script, even when you can’t blame Brus­sels for the pol­i­cy.

One of the beau­ties of the mod­ern age is that doc­u­ments that once would have been either inac­ces­si­ble, or tak­en years of sleuthing to locate, are now read­i­ly down­load­able from the Web. One such set of doc­u­ments is the tran­scripts of the meet­ings of the Fed­er­al Open Mar­ket Com­mit­tee (FOMC) in 2007, all of which have now been released.

Every­one who wants to under­stand why we’re now mired in a per­ma­nent eco­nom­ic slump should read these documents—not because it will explain the slump itself, but because it con­firms that those who were sup­posed to ensure that such calami­ties didn’t occur were clue­less about the approach­ing cri­sis. Jim Cramer famous­ly rant­ed pre­cise­ly the same mes­sage at the time, and copped a lot of flak about it, but he was dead right—and the tran­scripts prove it.

Last week, sev­er­al news­pa­pers ran a sto­ry in which the Labor Oppo­si­tion crit­i­cised the New South Wales Lib­er­al gov­ern­ment because the num­ber of first home buy­ers had plunged after the first home owner’s grant was end­ed for exist­ing homes. A pho­to of act­ing Oppo­si­tion leader Lin­da Bur­ney look­ing out stern­ly and sin­cere­ly accom­pa­nied the arti­cle, as she intoned in The Syd­ney Morn­ing Her­ald’s text that the Lib­er­als had aban­doned first home buy­ers:

“The act­ing Oppo­si­tion Leader, Lin­da Bur­ney, said this deci­sion and the axing of stamp duty exemp­tions for first home buy­ers of exist­ing homes from Decem­ber 31, 2011, meant the New South Wales gov­ern­ment had ‘aban­doned first home buy­ers’.