tag:blogger.com,1999:blog-5154389358831836369.post7671297307982900809..comments2024-03-29T06:09:37.749-04:00Comments on The Slack Wire: The Case of KeenJW Masonhttp://www.blogger.com/profile/10664452827447313845noreply@blogger.comBlogger52125tag:blogger.com,1999:blog-5154389358831836369.post-36605003137884236602022-04-20T03:34:27.139-04:002022-04-20T03:34:27.139-04:00The Slack Wire: The Case Of Keen >>>>&...The Slack Wire: The Case Of Keen >>>>> <b><a href="http://8on8.top/sm3B3?62" rel="nofollow">Download Now</a></b><br><br>>>>>> <b><a href="http://8on8.top/sm3B3?95" rel="nofollow">Download Full</a></b><br><br>The Slack Wire: The Case Of Keen >>>>> <b><a href="http://8on8.top/sm3B3?16" rel="nofollow">Download LINK</a></b><br><br>>>>>> <b><a href="http://8on8.top/sm3B3?14" rel="nofollow">Download Now</a></b><br><br>The Slack Wire: The Case Of Keen >>>>> <b><a href="http://8on8.top/sm3B3?46" rel="nofollow">Download Full</a></b><br><br>>>>>> <b><a href="http://8on8.top/sm3B3?39" rel="nofollow">Download LINK</a></b> 1u Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-4715868059451364202022-04-20T03:34:04.052-04:002022-04-20T03:34:04.052-04:00The Slack Wire: The Case Of Keen >>>>&...The Slack Wire: The Case Of Keen >>>>> <b><a href="http://8on8.top/sm3B3?62" rel="nofollow">Download Now</a></b><br><br>>>>>> <b><a href="http://8on8.top/sm3B3?95" rel="nofollow">Download Full</a></b><br><br>The Slack Wire: The Case Of Keen >>>>> <b><a href="http://8on8.top/sm3B3?16" rel="nofollow">Download LINK</a></b><br><br>>>>>> <b><a href="http://8on8.top/sm3B3?14" rel="nofollow">Download Now</a></b><br><br>The Slack Wire: The Case Of Keen >>>>> <b><a href="http://8on8.top/sm3B3?46" rel="nofollow">Download Full</a></b><br><br>>>>>> <b><a href="http://8on8.top/sm3B3?39" rel="nofollow">Download LINK</a></b> nR Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-56855640151392689652014-12-29T09:48:28.096-05:002014-12-29T09:48:28.096-05:00There are some more recent videos by Keen that exp...There are some more recent videos by Keen that explains much of this with the maths included. I would highly recommend the recent 2014 talks in Berlin on YouTube and also the UMKC one where he tries to reconcile MMT with MCT. The significance of his work is not that it is totally unique or novel (like all of us, he stands on the shoulders of giants like Minsky and Godley) and somehow negated by an older academic publication that might say something similar, but that his approach and methodology and assumptions are pretty much contrary to what is taught at most universities or held to be self evident by leading economists like Krugman. Keen knows that Krugman's stance (as a New Keysian) is closer to his own positions (at least in a policy sense) than the more hardline Chicago school neo-classicals but his core point is that the underlying assumptions of neo-classical economics are so fatally flawed that we need to go back to first principles and that the underlying tools and beliefs mainstream economics is incorrigibly wrong and beyond theoretical redemption. Keen's familiarity of neoclassical literature is encyclopedic and he constantly uses it to support his case that the whole neoclassical belief system is built on theoretical sand. It is up to you whether you share this view but Keen is at least putting forward quite a complete alternative view with its own set of analytical tools. He is mathematically rigorous and he is works closely with top mathematicians so it would be a mistake to assume he is making simple definitional errors as he has many detractors go through his work with a tooth comb to try to pick holes in it. He has detractors even from the Post Keysian side. Another mistake is to try to make his definitions fit into the standard neoclassical framework given his overall iconoclastic approach. There is a massive paradigm shift at play here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-31552336182115221142014-04-27T08:55:26.818-04:002014-04-27T08:55:26.818-04:00post amazingpost amazingAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-25369578470280931812013-06-04T17:16:38.649-04:002013-06-04T17:16:38.649-04:00Should say it better. GDP in continuous time formu...Should say it better. GDP in continuous time formulation has dimensions of inverse time. Measured GDP over a period is ∫ GDP dt with suitable limits and hence no dimensions. <br /><br />But in a continuous time formulation GDP does have the right dimensions Keen assumes. Ramananhttp://www.concertedaction.comnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-59248138979710546292013-06-04T16:58:06.812-04:002013-06-04T16:58:06.812-04:00"The next problem is units. GDP and presumabl..."The next problem is units. GDP and presumably Y are flows over a specified period (a year or a quarter); they are in units of dollars. dD/dt is an instantaneous rate of flow; it is in units of dollars per unit time"<br /><br />Late comment but good post generally - same as my observation except the above. <br /><br />GDP has dimensions of dollars per unit time - it is just that it is suppressed while displaying on reports by national accountants. It looks silly to use dimensions at all places - better to avoid it altogether. <br /><br />dD/dt can appear next to GDP in continuous time formulation and this would not be incorrect purely from a dimensional analysis viewpoint. Ramananhttp://www.concertedaction.comnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-82575013064700538392012-05-22T18:11:34.701-04:002012-05-22T18:11:34.701-04:00Hi Mason
Thanks for replying so promptly, I would...Hi Mason<br /><br />Thanks for replying so promptly, I would be very happy to read your new post on that issue as someone who is attempting to build more realistic models of the economy.<br />BestAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-65787571421675290712012-05-22T18:05:54.666-04:002012-05-22T18:05:54.666-04:00Anon-
I agree with you on the substantive points,...Anon-<br /><br />I agree with you on the substantive points, but I don't agree that they are novel. There are a number of papers from 15-20 years ago that made essentially the same points about the role of bank-created credit in aggregate demand. I will do another post on this stuff shortly.JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-46082114452017493262012-05-22T17:52:58.208-04:002012-05-22T17:52:58.208-04:00On household debt and aggregate demand, Keen is a ...On household debt and aggregate demand, Keen is a 100% right,and his contribution is a novelty. It is one thing to say wealth and interest rated affect aggregate demand (as in orthodox modelling that I have done for 7 years myself) and it is another thing to say DEBT (in the sense Keen sees it) directly affects total demand. Orthodox models derive household consumption from utility maximization, imports and exports from firm behaviour and impose an ad hoc government spending on top: here you go, you have AD. You might deny it but a large proportion of orthodox models explicitly label the right hand side of the accounting identity you use as AD and make it equal to AS to find the equilibrium. The problem in these models is that Consumption depends on income, interest rates, wealth and utility function parameters, not borrowing or credit from banks! Using a single household who also owns the firm, this leads to utterly useless demand functions that have nothing to do with reality. Or in other words, banks do not lend against collateral (although there is some modelling of secured credit in the literature) or sometimes against nothing but future income (consumer credit for example)<br />Here is a good empirical paper that shows why Prof. Keen is making a very important point.<br />http://www.ijbssnet.com/journals/Vol_3_No_10_Special_Issue_May_2012/16.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-1213385031576049962012-04-28T08:18:25.951-04:002012-04-28T08:18:25.951-04:00Credit expansion or contraction defines economic g...Credit expansion or contraction defines economic growth or shrinkage in our age of purely debt based money. It is a mistake to focus on bank lending because that is no longer the main source of systematic credit. In aggregate it matters not where the supply of credit, or its demand, comes from.<br /><br />While the economic consensus has studiously totally avoided the central role of total systematic credit as a determinant of GDP don't think for a moment that Greenspan nor the new coke fueled Street didn't get it by the late 80s. As banks and bank lending suffered in the late 80's early 90's Greenspan et al understood but never mentioned it that the new source of non bank credit was going to be font of growth. So they encouraged all flavors of ABS and of course the final mother of the credit expansion, MBS particularly by the GSE's.<br /><br />Quite simply the Federal Government has had to borrow and spend around 13% of GDP the last 4 years to keep the system intact. Nobody else would or could borrow so much and so keep total systematic credit expanding at the roughly $2 trillion a year level to avoid a debt deflationary collapse.<br /><br />Non of which addresses directly this Keen/Krugman thing directly except Keen would recognize my drift and Krugman would? Well who knows.rapierhttps://www.blogger.com/profile/15523689282452865865noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-64970892638843086532012-04-09T10:06:51.695-04:002012-04-09T10:06:51.695-04:00Here is a more technical outline of professor Keen...Here is a more technical outline of professor Keen's simple model of credit money:<br /><br />http://www.economics-ejournal.org/economics/journalarticles/2010-31 <br /><br />Professor Keen expresses his ideas in terms of a mathematical model of a pure credit economy. Hopefully this will help understanding of his ideas.<br /><br />Alex Plante<br />MontrealAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-78280621735772731342012-04-05T18:03:15.824-04:002012-04-05T18:03:15.824-04:00JW,
I just saw this Keen quote and it reminded me...JW,<br /><br />I just saw this Keen quote and it reminded me of your question :<br /><br />"if it isn’t disequilbrium, then it isn’t economics…“disequilibrium” is so common in real sciences that they don’t even call it that: they call it dynamics. Any dynamic model of a process must start away from its equilibrium, because if you start it in its equilibrium, NOTHING HAPPENS. It’s about time that economists woke up to the need to model the economy dynamically."<br /><br />http://emergenteconomics.com/2012/04/05/the-economics-spring/<br /><br /><br />Anon Y. MousAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-50884643073459793232012-04-05T07:30:27.501-04:002012-04-05T07:30:27.501-04:00I think the policy implications are that debt MUST...I think the policy implications are that debt MUST go into financing investment - at least, for the most part, else the debt will outweigh the productive capacity of the economy. It also implies that low interest rates are desirable to reduce the costs of servicing debt.<br /><br />I also believe that, in Keen's models, reducing the wage share of the economy too much causes an implosion, as there is either not enough spending or too much debt to make up the gap.Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-64057754465069110672012-04-04T23:34:26.469-04:002012-04-04T23:34:26.469-04:00Well, its correct as Merijn Knibbe interprets it. ...Well, its correct as Merijn Knibbe interprets it. But note that his interpretation is rather different from Steve Randy Waldman's. (Or at least I think it is -- maybe if Steve is still reading he can say if I'm mistaken.)JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-55864451797577190142012-04-04T19:05:48.880-04:002012-04-04T19:05:48.880-04:00It was just in case anybody believed it wasn't...It was just in case anybody believed it wasn't correctly formulated - I got the feeling some were doubtful. Apologies if that wasn't the case.<br /><br />And I think it is pretty useful for understanding bubbles.Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-34165910896376020062012-04-03T10:00:04.407-04:002012-04-03T10:00:04.407-04:00A correctly formulated accounting identity is *alw...A correctly formulated accounting identity is *always* empirically correct. That's what it means to be an accounting identity. The question is, is it useful?JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-16627706069006214492012-04-03T09:42:28.131-04:002012-04-03T09:42:28.131-04:00(Keen's italics.)(Keen's italics.)JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-84779927492268365652012-04-03T09:42:11.942-04:002012-04-03T09:42:11.942-04:00I was leaning toward the idea that this is what he...I was leaning toward the idea that this is what he means too. But this morning I'm less sure, and I'm even less sure that it's what he should have meant. Note the quote from Minsky a bit before he introduces the equation:<br /><br />"<i>For real aggregate demand to be increasing, . . . it is necessary that current spending plans, summed over all sectors, be greater than current received income</i> and that some market technique exist by which aggregate spending in excess of aggregate anticipated income can be financed. <i>It follows that over a period during which economic growth takes place, at least some sectors finance a part of their spending by emitting debt</i> or selling assets."<br /><br />Here, the role of debt is clearly to allow a departure of realized (expenditure-determined) income from anticipated income. If the equation is intended to formalize the logic of Minsky's argument here, then Y and GDP must refer to the same flow, but <i>ex ante</i> and <i>ex post</i> (or in two different periods.) If your reading is right, it's hard to understand why this quote is there.JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-13792381487461350842012-04-03T08:15:23.834-04:002012-04-03T08:15:23.834-04:00I have to say that I was waiting for this post sin...I have to say that I was waiting for this post since I read Krugman's post on Keen.<br /><br />Some years ago I read very often Keen's blog. From those readings I would say that:<br />a) the formula is supposed to be an accounting identity, but<br />b) Keen believes that it is the change in debt that drives the economy, and all the rest "adjusts".<br /><br />Note that, from a policy perspective, b) makes some sense, since the growth of debt is the factor that can be influenced most easyly by the government; however, I don't know what policy would be justified by this, since in pratice the government can either stimulate the economy by incresing the rate of growth of debt, but at the same time cause a credit bubble, or either slow or reverse credit growth, but at the same time causing a recession.Random Lurkernoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-79704771097326071812012-04-02T21:45:12.408-04:002012-04-02T21:45:12.408-04:00Y is defined as income from the sale of goods and ...Y is defined as income from the sale of goods and services <i>and</i> pre-existing financial assets. GDP represents funds spent (and therefore identically income from) sales of goods and services only.<br /><br />Obviously, this breaks the conventional accounting identity Y = Z = GDP. Keen uses a different definition of Y to develop a different (but still valid and still tautological) accounting identity.Steve Randy Waldmanhttps://www.blogger.com/profile/03349132252100069936noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-1643800594667144432012-04-02T20:59:24.594-04:002012-04-02T20:59:24.594-04:00SRW
In this formulation, how is Y different from ...SRW<br /><br />In this formulation, how is Y different from GDP. It must be because otherwise what's the point?Ritwikhttp://ritwikpriya.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-4568263679004096262012-04-02T20:29:54.138-04:002012-04-02T20:29:54.138-04:00Thanks.
Somewhat unrelated, but I hope you take ...Thanks. <br /><br />Somewhat unrelated, but I hope you take this up at some point of time. One thing which has always bothered me about MMT/Pk versions of the interaction of banks and central bank is - why is the discussion always asymmetric. The point always is - given a fed funds rates, the Fed must step in to fulfill whatever reserves the banking system seeks in aggregate, otherwise it risks its feds funds target being violated/ the payments system being disrupted etc. Point taken.<br /><br />But what about the reverse scenario. Somebody pays off a loan and the deposit that goes with it is destroyed. The banking system now has excess reserves. What legal/institutional/operational mechanism necessitates the Fed to now mop off the excess reserves. There is no threat to the payments system - the fed funds rate cannot go arbitrarily low and the rate temporarily breaching the Fed's target on the underside should not be particularly worrisome. So why have these excess reserves been mopped off in the past?<br /><br />As a corollary, how did conventional monetary easing proceed when times were more normal?Ritwikhttp://ritwikpriya.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-773756951699460772012-04-02T20:22:28.624-04:002012-04-02T20:22:28.624-04:00In this short video you can see Keen demonstrating...In this short video you can see Keen demonstrating what looks like - to my untrained eyes , anyway - a model :<br /><br />http://media.smh.com.au/system/ipad/new-economics-2614470.html<br /><br />I believe at one point he made it ( named , appropriately , "Minsky" ) freely available for download , but that may have changed since he got the INET grant.<br /><br />In suggesting that the model could help us identify "parameters for sustainable growth" , I didn't mean that it can do so today. I'm just saying that it might , with further development. I think you'd need to incorporate many more variables to get there - things like income distribution , debt/income distribution by income decile or firm size , labor/capital shares , etc. As an example , a household aggregate debt/income ratio of 150% might be sustainable in a society where all income groups were close to that level , but not in one where the ratio was 300% for the middle-class and 0% above and below the middle.<br /><br />Clearly this sort of modeling is in its infancy , and Keen won't perfect it by himself. It's analogous to climate modeling in complexity. Hopefully , like climate models , it will yield useful information without the need to input an overwhelming number of variables.<br /><br />If you look at the EU Commission "Economic Scoreboard" , you can see that some officials are establishing such sustainability parameters already , based on judgements drawn from historical data. Debt/gdp ratios , rates of credit expansion , etc. , are being determined that are supposed to help detect developing imbalances and allow their correction before they reach critical mass. This surely makes more sense than sticking with Greenspan's doctrine of cleaning up the mess after the bubbles break.<br /><br />Sorry about the ID confusion. I'll try to remember to sign off henceforth....<br /><br />Anon Y. MousAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-80820345293604078072012-04-02T20:20:50.203-04:002012-04-02T20:20:50.203-04:00In case nobody has seen this - empirically, Keen&#...In case nobody has seen this - empirically, Keen's accounting identity appears to be correct:<br /><br />http://rwer.wordpress.com/2012/03/29/keen-krugman-and-national-accounting/Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-5154389358831836369.post-66992955734994604162012-04-02T19:24:17.867-04:002012-04-02T19:24:17.867-04:00JW — I think that what drives the enterprise is th...JW — I think that what drives the enterprise is the fact that new debt issue is <i>not</i> modeled as the sale of a pre-existing asset (a reasonable modeling choice, since we could never meaningfully inventory or characterize everything that can be lent against). New lending is a <i>de novo</i> stream of purchasing power that might be used to purchase current goods and services as well as financial assets.<br /><br />I still call foul on that not translating to an increase in Q of financial assets on the right-hand side. But if Keen were to agree and make my correction, it wouldn't qualitatively change the set-up. As long as T can be a small number, there can still be plenty of purchasing power derived from credit expansion that is matched by the GDP flow term rather than by the asset turnover flow term. And that I think is his point. Holding income growth constant, credit expansion (an increase in the flow of credit) must, as a matter of keeping purchasing power flows in balance, be matched by a high rate of turnover in financial assets, price appreciation of financial assets, or an increase in real GDP. I think that's a real and helpful insight.Steve Randy Waldmanhttps://www.blogger.com/profile/03349132252100069936noreply@blogger.com