Extending monetary macroeconomics and developing a dynamic ...
Steve Keen
Monetary macroeconomics & a simulation program
Extending monetary macroeconomics and developing a dynamic monetary simulation tool The Great Recession is empirical proof that virtually every methodological choice made by neoclassical macroeconomics was wrong. Capitalism cannot be modeled as a single “representative agent”, money and credit cannot be ignored, finance destabilizes the economy, and the economy is permanently in disequilibrium. Our task is now to develop an alternative macroeconomics with the foundations that neoclassical economics omitted. I began my contribution to that task in 1995, with a nonlinear dynamic model of Minsky’s Financial Instability Hypothesis (Keen 1995). This model successfully anticipated both the financial crisis and the preceding period mistakenly labeled “The Great Moderation” by neoclassical economists, as my closing paragraph indicated: From the perspective of economic theory and policy, this vision of a capitalist economy with finance requires us to go beyond that habit of mind which Keynes described so well, the excessive reliance on the (stable) recent past as a guide to the future. The chaotic dynamics explored in this paper should warn us against accepting a period of relative tranquility in a capitalist economy as anything other than a lull before the storm. (Keen, 1995, p. 634; emphasis added) However the model was not strictly monetary—debt was modeled, but the money creation process was not—and its construction required knowledge of the techniques of complexity theory, which are foreign to most economists. I have since developed a strictly monetary model of Minsky’s hypothesis (Keen doi:10.1016/j.jebo.2011.01.010), using a methodology that develops stock‐flow consistent models of monetary dynamics. This method is similar to Godley’s stock‐flow consistent economic modeling, but transcends it in several ways—including developing systems of differential rather than difference equations. Though the model in this forthcoming paper is itself complex, it only scratches the surface of what is possible with this new methodology. This project will both develop this monetary macroeconomic model further, and produce a public domain simulation tool that makes dynamic monetary modeling both easy and accessible—even for researchers who, like the majority of economists (including non‐neoclassical economists) have not been sufficiently trained in dynamics.
The methodology Schumpeter, Marx, Keynes and Minsky are the core intellectual foundations of my approach to economics, but the direct inspiration for my monetary modeling method was a combination of complexity theory and the “Monetary Circuit” approach. The monetary component of my model is derived directly from the accounting for the flows between the bank accounts of the major social classes in a monetary economy. As an illustration, consider a pure credit economy with just 3 social entities—a firm, workers and a bank—and the basic financial operations of the bank lending money to the firm, the firm paying wages to hire workers, the capitalist,
Page 1
Steve Keen
Monetary macroeconomics & a simulation program
workers and banker consuming the output of the firm, and the firm repaying its debt. These operations are recorded in a symbolic matrix in a computer algebra system like Mathcad or Mathematica: 1 1 1 1 0 "Type" "Bank Vault" "Firm Loan (FL)" "Firm Deposit (FD)" "Bank Deposit (BD)" "Worker Deposit (WD)" "Account" W D( t) BD( t) FD( t ) FL( t ) "Account" BV( t) "Make Loan" 0 0 A 0 A 0 0 0 A 0 "Record Loan" "Interest on Loan" 0 0 0 B 0 Simple 0 B B 0 0 "Pay Interest" 0 C C 0 0 "Interest on Deposit" D 0 D 0 0 "Wages" E 0 E 0 0 "Interest on Deposit" "Consumption" F FG 0 0 G "Repay Loan" 0 H 0 H 0 0 0 H 0 0 "Record Repayment"
A symbolic logic program then reads this table and a set of financial flow dynamics to derive a model: d SystemODEs( Simple) FD( t) dt
d FL( t) BV( t) v ( t) FL( t) d ( t) FL.( t ) rL( t) dt BD( t) b ( t) FL( t) d ( t) FD( t) f ( t ) BV( t) v ( t) FD( t) rD( t) W D( t ) w ( w ) d BD( t) BD( t) b ( t) dt d W D( t) FD( t) f ( t) FD( t ) rD( t) W D( t) w ( w ) dt d BV( t) dt
FL( t) d ( t) BV( t) v ( t)
This covers the monetary aspect of modeling. I use Goodwin’s growth cycle model as the foundation of my modeling of the physical output of the economy (Goodwin 1967; Blatt 1983, pp. 204‐216), and couple the two aspects of the economy using a dynamic pricing equation based on empirical research into price setting: prices are set by a markup on the monetary cost of production (Blinder 1998, Ch. 4; Lee 1998). The combined monetary‐physical economy model in my forthcoming JEBO paper generates the qualitative stylized facts of both the Great Moderation and the Great Recession (though it has not yet been calibrated to the data, nor is it yet enabled to consider the impact of fiscal or monetary policy or bankruptcy). Inflation, Unemployment and Debt 20
Unemployment and Inflation
4
15
300
12.5
00
0
10
10
Percent
2
Percent of Output
Percent
10
2
20
0
20
7.5 5
4
40
2.5 5 1980
60
200
2.5 0
Inflation Unemployment Debt to Output (Right-hand axis)
250
0 150
Unemployment Inflation Debt to GDP 1985
1990
1995
2000
Year; Source BLS
Page 2
2005
2010
100 2015
Steve Keen
Monetary macroeconomics & a simulation program
Though this is, to my knowledge, the only model that generates the key stylized facts of the last 30 years of macroeconomic data, it is still only preliminary, and scratches the surface of what this modeling methodology can achieve. In the former respect, it has to be extended to incorporate a government sector and a Central Bank. In the latter regard, the methodology easily supports dynamic disequilibrium multi‐sectoral modeling, which I have illustrated with a 41‐equation, 4 sectoral model (as yet unpublished). However such extensions must currently be hand‐coded, and it would be far more effective to develop them programmatically. The Rate of Profit in a Monetary Multisectoral Model of Production 15
Profit/Capita (Percent)
10
5
0
Capital Goods Consumer Goods Agriculture Energy 5
0
20
40
60
80
100
Years
I also want to make this approach to modeling available to other non‐orthodox economists, and to students who should find this dynamic approach to economics far more appealing than the static equilibrium perspective of neoclassical economics. Dynamics has to be made easy and attractive to students if we are ever to break the hegemony of the simplistic but superficially appealing neoclassical model. A prototype computer modeling system has been developed, and is available for free download from my blog at www.debtdeflation.com/blogs/QED.
Page 3
Steve Keen
Monetary macroeconomics & a simulation program
While this program is suitable for small simulations, it only scratches the surface of what could be done with this approach.
Project Objectives This project would enable the development of a far more complete monetary model, with government and private credit money creation included, and the capacity to examine the impact of different monetary and fiscal policies as ways of overcoming the Great Recession. These would include non‐ orthodox policies like increasing wages, and abolishing debt lent to fund speculation rather than investment—issues that cannot even be considered by neoclassical models which abstract from the very existence of money and private debt. It would also enable the development of a far more sophisticated modeling program than QED. The basic framework would be similar to existing system dynamic programs like Simulink, Vensim, Vissim, IThink and so on. The main additional feature would be the tabular method for recording financial flow dynamics, which makes it far easier (and two orders of magnitude faster) to develop monetary models than is possible with the standard flowchart approach of these existing programs.
Why not multi-agent? Numerous researchers have reacted to the failure of the neoclassical “representative agent” approach by developing multi‐agent models of economics with heterogeneous agents. While I applaud such work, my intuition from the SMD conditions that undermine neoclassical theory is that even single‐market phenomena are the product of emergent properties from agent interaction, where the structure of each agent gives little or no guidance as to what the market‐level behavior will be. Yet our economic data is macro (and single market) level, not information about agents themselves. This implies that the entire agenda of modeling economics from the agent level up may be a “red‐ herring” flowing from the neoclassical obsession with individual agents, and that a better approach may be to adopt the “top down” method common in other disciplines, rather than trying a different approach to the “bottom up” method that neoclassical economics has always followed. Briefly, the SMD conditions prove that a market demand curve derived from 2 or more heterogeneous agents who both have classic downward‐sloping demand curves can have any shape at all (even Mas‐ Colell, Whinston et al. 1995 admits this: see p. 602). Therefore even “supply and demand” dynamics in a single market cannot be reduced to the behavior of isolated agents. While multi‐agent modelers like Ussher are well aware of this, and are delighted when their models illustrate emergent properties, this also generates the problem that there is an “emergent properties” barrier between specifying individual agents in a multi‐agent model and the macro—and even single market—behavior the model will generate. I therefore believe there is much to be gained by “top down” modeling using systems of differential equations. Not only are they easier to calibrate to the data (though of course there remains the
Page 4
Steve Keen
Monetary macroeconomics & a simulation program
computationally challenging issue of nonlinear parameter estimation), they are consistent with the macro‐thinking that characterized Schumpeter, Marx and Keynes.
Budget The basic expense for this project would be the hiring of a computing Post‐Doc with skills in programming computational methods (Runge‐Kutta and the like), vector graphics and user interface design. At least two years should be allowed for the development of this program, which implies a base cost of $A194,344 (the standard salary for a Post‐Doc in Australia is that for a Level A academic at Step 3, which is $75,916 p.a. plus a 28% allowance for on‐costs like superannuation, etc.). Additional support to provide time for me to develop the core models further and supervise the Post‐Doc would bring the total to the maximum allowed in your grant scheme. I will provide a more detailed budget in the second round.
Curriculum Vitae I am Associate Professor of Economics at the University of Western Sydney, the author of Debunking Economics (Zed Books 2001), one of the 12 economists identified by (Bezemer 2009; http://mpra.ub.uni‐ muenchen.de/15892/) as having warned of the financial crisis before it happened, winner of the Revere Award from the Real World Economics Review for anticipating the Great Recession (http://rwer.wordpress.com/2010/05/13/keen‐roubini‐and‐baker‐win‐revere‐award‐for‐economics‐2/), and one of the world's leading experts on Minsky's Financial Instability Hypothesis. A list of relevant papers is below; see my websites www.debtdeflation.com/blogs and www.debunkingeconomics.com for more details.
Keen, S. (1993). "Use‐Value, Exchange Value, and the Demise of Marx's Labor Theory of Value." Journal of the History of Economic Thought 15(1): 107‐121. Keen, S. (1995). "Finance and Economic Breakdown: Modeling Minsky's 'Financial Instability Hypothesis.'." Journal of Post Keynesian Economics 17(4): 607‐635. Keen, S. (1996). "The Chaos of Finance: The Chaotic and Marxian Foundations of Minsky's 'Financial Instability Hypothesis.'." Economies et Societes 30(2‐3): 55‐82. Keen, S. (1997). "From Stochastics to Complexity in Models of Economic Instability." Nonlinear Dynamics, Psychology, and Life Sciences 1(2): 151‐172. Keen, S. (1998). "Answers (and Questions) for Sraffians (and Kaleckians)." Review of Political Economy 10(1): 73‐87. Keen, S. (2000). The Nonlinear Economics of Debt Deflation. Commerce, complexity, and evolution: Topics in economics, finance, marketing, and management: Proceedings of the Twelfth International Symposium in Economic Theory and Econometrics. W. A. Barnett. New York, Cambridge University Press: 83‐110. Keen, S. (2001). Debunking economics: The naked emperor of the social sciences. Annandale Sydney & London UK, Pluto Press Australia & Zed Books UK.
Page 5
Steve Keen
Monetary macroeconomics & a simulation program
Keen, S. (2001). Minsky's Thesis: Keynesian or Marxian? The economic legacy of Hyman Minsky. Volume 1. Financial Keynesianism and market instability. R. Bellofiore and P. Ferri. Cheltenham, U.K., Edward Elgar: 106‐120. Keen, S. (2007). Deeper in Debt: Australia's addiction to borrowed money. Occasional Papers, Centre for Policy Development. Keen, S. (2007). Economic Depressions. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 302‐306. Keen, S. (2007). Nonlinear Systems. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 523‐524. Keen, S. (2007). Endogenous Money. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 258‐260. Keen, S. (2007). The Financial Instability Hypothesis. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 145‐146. Keen, S. (2008). Keynes’s ‘revolving fund of finance’ and transactions in the circuit. Keynes and Macroeconomics after 70 Years. R. Wray and M. Forstater. Cheltenham, Edward Elgar: 259‐278. Keen, S. (2009). "Bailing out the Titanic with a Thimble." Economic Analysis & Policy 39(1): 3‐24. Keen, S. (2009). The dynamics of the monetary circuit. The Political Economy of Monetary Circuits: Tradition and Change. S. Rossi and J.‐F. Ponsot. London, Palgrave Macmillan: 161‐187. Keen, S. (2009). "The Global Financial Crisis, Credit Crunches and Deleveraging." Journal of Australian Political Economy 64: 18‐32. Keen, S. (2009). "Household Debt‐the final stage in an artificially extended Ponzi Bubble." Australian Economic Review 42: 347–357. Keen, S. (2010). "Solving the Paradox of Monetary Profits." Economics: The Open‐Access, Open Assessment E‐Journal 4(2010‐31).
Bibliography Bezemer, D. J. (2009). “No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models. Groningen, The Netherlands, Faculty of Economics University of Groningen. Blatt, J. M. (1983). Dynamic economic systems : a post‐Keynesian approach. Armonk, N.Y, M.E. Sharpe. Blinder, A. S. (1998). Asking about prices : a new approach to understanding price stickiness. New York, Russell Sage Foundation. Goodwin, R. (1967). A growth cycle. Socialism, Capitalism and Economic Growth. C. H. Feinstein. Cambridge, Cambridge University Press: 54‐58. Keen, S. "A Monetary Minsky Model of the Great Moderation and the Great Recession." Journal of Economic Behavior & Organization In Press, Accepted Manuscript. Keen, S. (1995). "Finance and Economic Breakdown: Modeling Minsky's 'Financial Instability Hypothesis.'." Journal of Post Keynesian Economics 17(4): 607‐635. Lee, F. S. (1998). Post Keynesian price theory. Cambridge, Cambridge University Press. Mas‐Colell, A., M. D. Whinston, et al. (1995). Microeconomic theory. New York :, Oxford University Press.
Page 6
Monetary macroeconomics & a simulation program
Extending monetary macroeconomics and developing a dynamic monetary simulation tool The Great Recession is empirical proof that virtually every methodological choice made by neoclassical macroeconomics was wrong. Capitalism cannot be modeled as a single “representative agent”, money and credit cannot be ignored, finance destabilizes the economy, and the economy is permanently in disequilibrium. Our task is now to develop an alternative macroeconomics with the foundations that neoclassical economics omitted. I began my contribution to that task in 1995, with a nonlinear dynamic model of Minsky’s Financial Instability Hypothesis (Keen 1995). This model successfully anticipated both the financial crisis and the preceding period mistakenly labeled “The Great Moderation” by neoclassical economists, as my closing paragraph indicated: From the perspective of economic theory and policy, this vision of a capitalist economy with finance requires us to go beyond that habit of mind which Keynes described so well, the excessive reliance on the (stable) recent past as a guide to the future. The chaotic dynamics explored in this paper should warn us against accepting a period of relative tranquility in a capitalist economy as anything other than a lull before the storm. (Keen, 1995, p. 634; emphasis added) However the model was not strictly monetary—debt was modeled, but the money creation process was not—and its construction required knowledge of the techniques of complexity theory, which are foreign to most economists. I have since developed a strictly monetary model of Minsky’s hypothesis (Keen doi:10.1016/j.jebo.2011.01.010), using a methodology that develops stock‐flow consistent models of monetary dynamics. This method is similar to Godley’s stock‐flow consistent economic modeling, but transcends it in several ways—including developing systems of differential rather than difference equations. Though the model in this forthcoming paper is itself complex, it only scratches the surface of what is possible with this new methodology. This project will both develop this monetary macroeconomic model further, and produce a public domain simulation tool that makes dynamic monetary modeling both easy and accessible—even for researchers who, like the majority of economists (including non‐neoclassical economists) have not been sufficiently trained in dynamics.
The methodology Schumpeter, Marx, Keynes and Minsky are the core intellectual foundations of my approach to economics, but the direct inspiration for my monetary modeling method was a combination of complexity theory and the “Monetary Circuit” approach. The monetary component of my model is derived directly from the accounting for the flows between the bank accounts of the major social classes in a monetary economy. As an illustration, consider a pure credit economy with just 3 social entities—a firm, workers and a bank—and the basic financial operations of the bank lending money to the firm, the firm paying wages to hire workers, the capitalist,
Page 1
Steve Keen
Monetary macroeconomics & a simulation program
workers and banker consuming the output of the firm, and the firm repaying its debt. These operations are recorded in a symbolic matrix in a computer algebra system like Mathcad or Mathematica: 1 1 1 1 0 "Type" "Bank Vault" "Firm Loan (FL)" "Firm Deposit (FD)" "Bank Deposit (BD)" "Worker Deposit (WD)" "Account" W D( t) BD( t) FD( t ) FL( t ) "Account" BV( t) "Make Loan" 0 0 A 0 A 0 0 0 A 0 "Record Loan" "Interest on Loan" 0 0 0 B 0 Simple 0 B B 0 0 "Pay Interest" 0 C C 0 0 "Interest on Deposit" D 0 D 0 0 "Wages" E 0 E 0 0 "Interest on Deposit" "Consumption" F FG 0 0 G "Repay Loan" 0 H 0 H 0 0 0 H 0 0 "Record Repayment"
A symbolic logic program then reads this table and a set of financial flow dynamics to derive a model: d SystemODEs( Simple) FD( t) dt
d FL( t) BV( t) v ( t) FL( t) d ( t) FL.( t ) rL( t) dt BD( t) b ( t) FL( t) d ( t) FD( t) f ( t ) BV( t) v ( t) FD( t) rD( t) W D( t ) w ( w ) d BD( t) BD( t) b ( t) dt d W D( t) FD( t) f ( t) FD( t ) rD( t) W D( t) w ( w ) dt d BV( t) dt
FL( t) d ( t) BV( t) v ( t)
This covers the monetary aspect of modeling. I use Goodwin’s growth cycle model as the foundation of my modeling of the physical output of the economy (Goodwin 1967; Blatt 1983, pp. 204‐216), and couple the two aspects of the economy using a dynamic pricing equation based on empirical research into price setting: prices are set by a markup on the monetary cost of production (Blinder 1998, Ch. 4; Lee 1998). The combined monetary‐physical economy model in my forthcoming JEBO paper generates the qualitative stylized facts of both the Great Moderation and the Great Recession (though it has not yet been calibrated to the data, nor is it yet enabled to consider the impact of fiscal or monetary policy or bankruptcy). Inflation, Unemployment and Debt 20
Unemployment and Inflation
4
15
300
12.5
00
0
10
10
Percent
2
Percent of Output
Percent
10
2
20
0
20
7.5 5
4
40
2.5 5 1980
60
200
2.5 0
Inflation Unemployment Debt to Output (Right-hand axis)
250
0 150
Unemployment Inflation Debt to GDP 1985
1990
1995
2000
Year; Source BLS
Page 2
2005
2010
100 2015
Steve Keen
Monetary macroeconomics & a simulation program
Though this is, to my knowledge, the only model that generates the key stylized facts of the last 30 years of macroeconomic data, it is still only preliminary, and scratches the surface of what this modeling methodology can achieve. In the former respect, it has to be extended to incorporate a government sector and a Central Bank. In the latter regard, the methodology easily supports dynamic disequilibrium multi‐sectoral modeling, which I have illustrated with a 41‐equation, 4 sectoral model (as yet unpublished). However such extensions must currently be hand‐coded, and it would be far more effective to develop them programmatically. The Rate of Profit in a Monetary Multisectoral Model of Production 15
Profit/Capita (Percent)
10
5
0
Capital Goods Consumer Goods Agriculture Energy 5
0
20
40
60
80
100
Years
I also want to make this approach to modeling available to other non‐orthodox economists, and to students who should find this dynamic approach to economics far more appealing than the static equilibrium perspective of neoclassical economics. Dynamics has to be made easy and attractive to students if we are ever to break the hegemony of the simplistic but superficially appealing neoclassical model. A prototype computer modeling system has been developed, and is available for free download from my blog at www.debtdeflation.com/blogs/QED.
Page 3
Steve Keen
Monetary macroeconomics & a simulation program
While this program is suitable for small simulations, it only scratches the surface of what could be done with this approach.
Project Objectives This project would enable the development of a far more complete monetary model, with government and private credit money creation included, and the capacity to examine the impact of different monetary and fiscal policies as ways of overcoming the Great Recession. These would include non‐ orthodox policies like increasing wages, and abolishing debt lent to fund speculation rather than investment—issues that cannot even be considered by neoclassical models which abstract from the very existence of money and private debt. It would also enable the development of a far more sophisticated modeling program than QED. The basic framework would be similar to existing system dynamic programs like Simulink, Vensim, Vissim, IThink and so on. The main additional feature would be the tabular method for recording financial flow dynamics, which makes it far easier (and two orders of magnitude faster) to develop monetary models than is possible with the standard flowchart approach of these existing programs.
Why not multi-agent? Numerous researchers have reacted to the failure of the neoclassical “representative agent” approach by developing multi‐agent models of economics with heterogeneous agents. While I applaud such work, my intuition from the SMD conditions that undermine neoclassical theory is that even single‐market phenomena are the product of emergent properties from agent interaction, where the structure of each agent gives little or no guidance as to what the market‐level behavior will be. Yet our economic data is macro (and single market) level, not information about agents themselves. This implies that the entire agenda of modeling economics from the agent level up may be a “red‐ herring” flowing from the neoclassical obsession with individual agents, and that a better approach may be to adopt the “top down” method common in other disciplines, rather than trying a different approach to the “bottom up” method that neoclassical economics has always followed. Briefly, the SMD conditions prove that a market demand curve derived from 2 or more heterogeneous agents who both have classic downward‐sloping demand curves can have any shape at all (even Mas‐ Colell, Whinston et al. 1995 admits this: see p. 602). Therefore even “supply and demand” dynamics in a single market cannot be reduced to the behavior of isolated agents. While multi‐agent modelers like Ussher are well aware of this, and are delighted when their models illustrate emergent properties, this also generates the problem that there is an “emergent properties” barrier between specifying individual agents in a multi‐agent model and the macro—and even single market—behavior the model will generate. I therefore believe there is much to be gained by “top down” modeling using systems of differential equations. Not only are they easier to calibrate to the data (though of course there remains the
Page 4
Steve Keen
Monetary macroeconomics & a simulation program
computationally challenging issue of nonlinear parameter estimation), they are consistent with the macro‐thinking that characterized Schumpeter, Marx and Keynes.
Budget The basic expense for this project would be the hiring of a computing Post‐Doc with skills in programming computational methods (Runge‐Kutta and the like), vector graphics and user interface design. At least two years should be allowed for the development of this program, which implies a base cost of $A194,344 (the standard salary for a Post‐Doc in Australia is that for a Level A academic at Step 3, which is $75,916 p.a. plus a 28% allowance for on‐costs like superannuation, etc.). Additional support to provide time for me to develop the core models further and supervise the Post‐Doc would bring the total to the maximum allowed in your grant scheme. I will provide a more detailed budget in the second round.
Curriculum Vitae I am Associate Professor of Economics at the University of Western Sydney, the author of Debunking Economics (Zed Books 2001), one of the 12 economists identified by (Bezemer 2009; http://mpra.ub.uni‐ muenchen.de/15892/) as having warned of the financial crisis before it happened, winner of the Revere Award from the Real World Economics Review for anticipating the Great Recession (http://rwer.wordpress.com/2010/05/13/keen‐roubini‐and‐baker‐win‐revere‐award‐for‐economics‐2/), and one of the world's leading experts on Minsky's Financial Instability Hypothesis. A list of relevant papers is below; see my websites www.debtdeflation.com/blogs and www.debunkingeconomics.com for more details.
Keen, S. (1993). "Use‐Value, Exchange Value, and the Demise of Marx's Labor Theory of Value." Journal of the History of Economic Thought 15(1): 107‐121. Keen, S. (1995). "Finance and Economic Breakdown: Modeling Minsky's 'Financial Instability Hypothesis.'." Journal of Post Keynesian Economics 17(4): 607‐635. Keen, S. (1996). "The Chaos of Finance: The Chaotic and Marxian Foundations of Minsky's 'Financial Instability Hypothesis.'." Economies et Societes 30(2‐3): 55‐82. Keen, S. (1997). "From Stochastics to Complexity in Models of Economic Instability." Nonlinear Dynamics, Psychology, and Life Sciences 1(2): 151‐172. Keen, S. (1998). "Answers (and Questions) for Sraffians (and Kaleckians)." Review of Political Economy 10(1): 73‐87. Keen, S. (2000). The Nonlinear Economics of Debt Deflation. Commerce, complexity, and evolution: Topics in economics, finance, marketing, and management: Proceedings of the Twelfth International Symposium in Economic Theory and Econometrics. W. A. Barnett. New York, Cambridge University Press: 83‐110. Keen, S. (2001). Debunking economics: The naked emperor of the social sciences. Annandale Sydney & London UK, Pluto Press Australia & Zed Books UK.
Page 5
Steve Keen
Monetary macroeconomics & a simulation program
Keen, S. (2001). Minsky's Thesis: Keynesian or Marxian? The economic legacy of Hyman Minsky. Volume 1. Financial Keynesianism and market instability. R. Bellofiore and P. Ferri. Cheltenham, U.K., Edward Elgar: 106‐120. Keen, S. (2007). Deeper in Debt: Australia's addiction to borrowed money. Occasional Papers, Centre for Policy Development. Keen, S. (2007). Economic Depressions. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 302‐306. Keen, S. (2007). Nonlinear Systems. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 523‐524. Keen, S. (2007). Endogenous Money. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 258‐260. Keen, S. (2007). The Financial Instability Hypothesis. The International Encyclopedia of the Social Sciences. W. A. Darity. New York, Macmillan Reference: 145‐146. Keen, S. (2008). Keynes’s ‘revolving fund of finance’ and transactions in the circuit. Keynes and Macroeconomics after 70 Years. R. Wray and M. Forstater. Cheltenham, Edward Elgar: 259‐278. Keen, S. (2009). "Bailing out the Titanic with a Thimble." Economic Analysis & Policy 39(1): 3‐24. Keen, S. (2009). The dynamics of the monetary circuit. The Political Economy of Monetary Circuits: Tradition and Change. S. Rossi and J.‐F. Ponsot. London, Palgrave Macmillan: 161‐187. Keen, S. (2009). "The Global Financial Crisis, Credit Crunches and Deleveraging." Journal of Australian Political Economy 64: 18‐32. Keen, S. (2009). "Household Debt‐the final stage in an artificially extended Ponzi Bubble." Australian Economic Review 42: 347–357. Keen, S. (2010). "Solving the Paradox of Monetary Profits." Economics: The Open‐Access, Open Assessment E‐Journal 4(2010‐31).
Bibliography Bezemer, D. J. (2009). “No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models. Groningen, The Netherlands, Faculty of Economics University of Groningen. Blatt, J. M. (1983). Dynamic economic systems : a post‐Keynesian approach. Armonk, N.Y, M.E. Sharpe. Blinder, A. S. (1998). Asking about prices : a new approach to understanding price stickiness. New York, Russell Sage Foundation. Goodwin, R. (1967). A growth cycle. Socialism, Capitalism and Economic Growth. C. H. Feinstein. Cambridge, Cambridge University Press: 54‐58. Keen, S. "A Monetary Minsky Model of the Great Moderation and the Great Recession." Journal of Economic Behavior & Organization In Press, Accepted Manuscript. Keen, S. (1995). "Finance and Economic Breakdown: Modeling Minsky's 'Financial Instability Hypothesis.'." Journal of Post Keynesian Economics 17(4): 607‐635. Lee, F. S. (1998). Post Keynesian price theory. Cambridge, Cambridge University Press. Mas‐Colell, A., M. D. Whinston, et al. (1995). Microeconomic theory. New York :, Oxford University Press.
Page 6
