Why the crisis is not over
To understand where the economic crisis came from, why it hasn't gone away, and what might work to end it, you have to understand the dynamics of private debt.
Most post-World War II recessions have lasted less than a year; this crisis has been going on for five. The preferred cure of austerity seems to be making it worse. To understand where it came from, why it hasn't gone away, and what might work to end it, you have to understand the dynamics of private debt. Steve Keen's models, inspired by Hyman Minsky's ‘Financial Instability Hypothesis’, anticipated the crisis and explain why it won't go away until private debt levels are drastically reduced. Steve Keen was one of the handful of economists to realize that a serious economic crisis was imminent, and to publicly warn of it from as early as December 2005.
Steve Keen was a Professor of Economics & Finance at the University of Western Sydney. He has over 70 academic publications on a diverse range of topics, including: modeling financial instability; monetary macroeconomics; mathematical flaws in Neoclassical microeconomics; logical flaws in Marxian economics; and Econophysics, chaos and complexity theory. His book ‘Debunking Economics’ (2001; 2012) sets out formal critiques of neoclassical economics in a manner that is accessible to the intelligent non-academic reader. He did pioneering work on modeling debt-deflation and maintains an influential blog on economics (www.debtdeflation.com/blogs).
Harry Garretsen is Professor of International Economics & Business and Dean of the Faculty of Economics and Business of the University of Groningen. He was Professor of International Economics in Utrecht and Nijmegen and is deputy crown member of the Social and Economic Council of the Netherlands (SER).
This lecture is organized in co-operation with the Faculty of Economics and Business and the Economic and Business student Faculty association (EBF) of the University of Groningen.