Steve Keen’s talk at INET is now up on the web (hat tip BT). His talk is billed as involving a discussion of “Instability in Financial Markets”. It also comes over as a primer on the economic approach of economist Hyman Minsky. In the session, Steve argues that one cannot model Minsky using a New Keynesian or traditional neoclassical approach because of the reliance of these modelling approaches on the economic equilibrium assumption. Keen sees this assumption as the major flaw that cannot be remedied using standard modelling approaches.
The talk runs just over 22 minutes and ends with two innovative solutions to this and future debt crises.
This post originally appeared at Credit Writedowns and is posted with permission.