I just returned from New York where I had the opportunity to listen to a (too brief) presentation/overview by the brilliant Australian macro- economist Steve Keen. Professor Keen has a place of honor within the Economic Undertow Pantheon because he periodically uses the word ‘energy’ (and ‘environment’) in a sentence. This contrasts to establishment economists who fail to acknowledge energy during their entire careers!

For those who are unfamiliar with Prof. Keen’s work, get thee over to his aptly- named ‘Debt-deflation blog’ and look around. Prof. Keen was in the US to present a paper to the Hyman Minsky Summer Conference a the Levy Institute of Bard College last month. It was certainly an outstanding conference with heavy hitters Marc Lavoie and Michael Hudson presenting among many, many others.

‘Our’ conference was graciously hosted by Mike Ward at the Good Company’ workplace with about 40 attendees. Professor Keen gave a rundown of his ‘New Improved’ macro- economic model and answered lots of questions along the way; we got very good usage out of the poor professor who was bombarded until hoarse. A lot
of ground was covered; current accounts, trade and currencies, debt categories, Wynne Godley and Hyman Minsky, China economics, the failure of equilibrium theory and much, much more.

Afterwards came a very nice outing where the Professor was pummeled with even more questions along with as much discussion of markets, finance, trading and politics as anyone could possibly stand. Ours was a very lively group representing a wide social cross- section including journalists, traders, economists, students and wayward bloggers (me).

Professor Keen was a marvelous good sport and my heartfelt thanks go out to him for so generously giving of himself. The education is appreciated.

His paper can be found HERE. Yves Smith (Susan Webber)’s extracts and remarks can be found on her excellent website in the article, ‘Steve Keen’s Scary Minsky Model’.

I’ll spend more time analyzing the model over the weekend. as well as add more details. It’s a straightforward approach that accomplishes what ‘establishment’ equilibrium economic theory cannot; modeling dis- equilibria leading to breakdown. His model carries forward primary factors such as wages/demand, capital, debt categories and compounding/feedback functions including those of the real or physical economy that are ignored by the equilibrium cabal.