UK Chartered Financial Advisors Society talk: Why the global economy is stagnating

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Author: ProfSteveKeen

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I gave this invited talk to the UK Chartered Financial Advisors Society about my non-mainstream approach to economics and finance. I cover why conventional macroeconomics that ignores banks and debt is wrong, my monetary alternative based on Hyman Minsky's Financial Instability Hypothesis, and the likely prospects for China.

Comments

Good to see another view being taught in Universities, not just the noe-Keynesian stuff, so widely being used as a fig-leaf for pure theft.
What are the policy implications of this analysis? The statement that capitalism in inherently unstable implies the need for something else, what? What does seem clear is the Austrian's argument against fractional reserve banking is supported by this analysis. Also, the Austrian business cycle theory of central bank induced malinvestment followed by a bust is supported. As shown in the model, if the banking sector is simply an intermediary (100 percent reserves), capitalism is stable. I know "capitalism" can be a modern pejorative, but what policies, structural changes do you think are suggested by the analysis?
Do you have a blog or any place you could upload the minsky file? I would be very interested to see it.
Steve H, so if as prof SK says, private debt is given its rightful recognition in terms of its economic impact, then policies that more closely govern creation and allocation of it would improve the way we run our economies. For instance ensuring debt is channeled towards productive investments rather than rent seeking, plus regulating the total amount. In other words, democratizing the creation of money. That's for the future, in order to get out of where we are now, then some form of neutralization of the existing private debt would alleviate the debt deflation we are currently experiencing (and China is about to enter).
Code Name D's second law of economics - the economy is always in recovery.

This is an observation about the media and how they report economic conditions. No mater how good the economy is, it is said to be in recovery. No mater how bad things get, its always described as "threatening the recovery."