Steve Keen's Debtwatch

This arti­cle begins with a tweet from the US eco­nom­ic blog­ger Noah Smith, who posts at Noah­pin­ion:

Here we go, I thought – yet anoth­er main­stream attack on my non-main­stream eco­nom­ics. But why on earth would he see Min­sky – my sim­u­la­tion pro­gram for mod­el­ling the econ­o­my as a fun­da­men­tal­ly mon­e­tary sys­tem – as basi­cal­ly absurd? Because “DSGE mod­el­ling is so much bet­ter”, per­haps? Or because there are so many oth­er good sys­tem dynam­ics pro­grams already, why pro­duce anoth­er one?

In the last four decades, there have been only a hand­ful of cen­tral bank and Trea­sury papers that I thought gen­uine­ly added to human knowl­edge. The eco­nom­ic-ori­ent­ed depart­ments with­in gov­ern­ments have in gen­er­al been even more dom­i­nat­ed by neo­clas­si­cal ortho­doxy than aca­d­e­m­ic depart­ments – and for good, bureau­crat­ic rea­sons.

The usu­al sus­pects are talk­ing up the prospects for Aus­tralian prop­er­ty prices as the New Year approach­es, with per­mab­ull and Aus­tralian Prop­er­ty Mon­i­tors senior econ­o­mist Andrew Wil­son fore­cast­ing 3–5 per cent growth nation­al­ly, and BIS Shrap­nel man­ag­ing direc­tor Robert Mel­lor call­ing for between 2 and 8 per cent growth for Syd­ney.

Such calls range from just equal to, to well above, the expect­ed rate of con­sumer price infla­tion. So they’re a return to the usu­al prop­er­ty mantra that house prices always rise faster than con­sumer prices because of the “fun­da­men­tals” of (a) a ris­ing pop­u­la­tion and (b) tight sup­ply.

A mature age stu­dent who will com­mence doing a PhD with me in 2013 has need of work pri­or to com­menc­ing his degree.

He has a back­ground in finance, risk mea­sure­ment, and anti-mon­ey laun­der­ing. He has also worked as a secu­ri­ty guard, and traf­fic con­troller, and is will­ing to con­sid­er any oth­er tem­po­rary work.

Please con­tact me at debunking@gmail.com if you have or know of a posi­tion, whether full-time, part-time, tem­po­rary or per­ma­nent.

As reg­u­lar read­ers would know, I have been devel­op­ing a com­put­er pro­gram for build­ing strict­ly mon­e­tary dynam­ic macro­eco­nom­ic mod­els. New read­ers might have seen this arti­cle in The Econ­o­mist:

Reform­ing macro­eco­nom­ics: Clau­dio Borio on the finan­cial cycle

where my work received the fol­low­ing men­tion:

Steve Keen, an Aus­tralian econ­o­mist, has long argued that macro needs to incor­po­rate these ideas, and has devel­oped a pro­to­type of a com­put­er pro­gram, called “Min­sky,” that can be used to mod­el economies as mon­e­tary sys­tems. So while most econ­o­mists have not embraced Mr Bori­o’s agen­da for the ref­or­ma­tion of macro, some have. That is encour­ag­ing news. (Click here for Clau­dio Bori­o’s paper)

This week’s post returns to the top­ic I dis­cussed just two weeks ago (Fis­cal cliff lessons from the ’30s, Novem­ber 26). I wrote that last post after I had giv­en Con­gress­man Den­nis Kucinich a pre­sen­ta­tion on the fis­cal cliff, and he asked me to return to Wash­ing­ton to give a pub­lic brief­ing in Con­gress. Today’s post is the doc­u­ment I spoke to at that brief­ing, and it’s sub­stan­tial­ly more detailed than the draft pub­lished two weeks ago.

Click here to read the rest of this post

Video of the talk:

Video of the slides:

Swags for Home­less, the Aus­tralian entre­pre­neur­ial char­i­ty that has designed a bril­liant portable bed for home­less peo­ple, has entered a movie “Home” into the Focus Foward short film con­test.

The film is now a semi-final­ist, and your vote can help it get to the Sun­dance Fes­ti­val, and pos­si­bly even win the $100,000 prize. Swags would use the expo­sure and the prize mon­ey to estab­lish oper­a­tions in the USA–a coun­try that has a des­per­ate need to make the life of its many home­less less mis­er­able.

Out­go­ing Ohio Con­gress­man Den­nis Kucinich arranged for me to give a brief­ing at Con­gress today on the Fis­cal Cliff, and how the down­turn of 1937 could be a fore­taste of what will hap­pen if the Cliff comes to pass.

I argue that an attempt by the gov­ern­ment to reduce its debt now may trig­ger a renewed bout of delever­ag­ing by the pri­vate sector–and this is what appeared to hap­pen in 1937, when con­fi­dence that the worst of the Depres­sion was over led to the gov­ern­ment reduc­ing its deficit.

My pre­sen­ta­tion at the Rosa Lux­em­bourg Foun­da­tion in Berlin today on how Neo­clas­si­cal eco­nom­ics mis­un­der­stands the role of pri­vate debt in a cap­i­tal­ist econ­o­my. I show how to use my Min­sky pro­gram to mod­el both the Neo­clas­si­cal “Loan­able Funds” vision of lend­ing and the empir­i­cal­ly-informed Post Key­ne­sian “Endoge­nous Mon­ey” mod­el.

I’m also about to start a Kick­starter cam­paign to raise addi­tion­al funds to devel­op Min­sky. Please “watch this space” and be ready to help pro­mote this cam­paign and help fund it. Min­sky as it stands has been writ­ten by one pro­gram­mer in about 800 hours. I want to be able to hire 3 pro­gram­mers for a min­i­mum of 2 years to ful­ly devel­op the pro­gram.

I gave the talk below to the Cam­bridge Soci­ety for Eco­nom­ic Plu­ral­ism yes­ter­day. This stu­dent-formed soci­ety is attempt­ing to open eco­nom­ics to debate–something which, despite the enor­mous schisms that exist with­in eco­nom­ics, is in prac­tice sad­ly lack­ing.

Econ­o­mists of one school of thought (such as the Neo­clas­si­cal) don’t lis­ten to or debate with those from oth­ers (such as the Post Key­ne­sian or Austrian)-as you can see from Cochrane’s dis­mis­sive remarks about non-Neo­clas­si­cal eco­nom­ics in the Play­boy arti­cle on eco­nom­ics. Even with­in schools (such as the Neo­clas­si­cal), dif­fer­ent fac­tions bare­ly com­mu­ni­cate with each oth­er-as you can see by perus­ing some of the “Fresh­wa­ter, New Clas­si­cal” ver­sus “Salt­wa­ter, Old Hick­sian” (whoops, sor­ry, they think they’re “New Key­ne­sians”) blog entries.